Shrimp farming in Bangladesh consists for more than 95% out of small scale extensive farms that produce volumes of around 250 kg of shrimp per crop. Shrimp ponds are relatively large and consist mainly of converted rice fields that are locally referred to as ghers. The productivity is much lower than in surrounding countries, mainly due to high mortality rates caused by white spot disease, weak quality PL’s, a lack of biosecurity and water quality control. However, production is close to organic. Farmers do not use commercial feeds and rarely use medicines or chemcals to prevent disease and control the water quality. The result at the farm is a beautiful product. A good taste, good smell, strong structure and potentially large size shrimps that are high in demand in high end niche markets around the world. However, the quality of the product is deteriorated as a result of post harvest loses and malpractices between the farm gate and the moment the shrimp is packed as finished product in the container. As a result of these malpractices Bangladesh is internationally not known for the quality of its products but for the cheap price it can offer as a result of its export tax of 10% and the duty free status in the EU market. This is a missed opportunity because the shrimp produced in Bangladesh could be marketed as a high quality niche product for niche markets around the world. Hopefully this situation will change during the coming years as several international organizations like Solidaridad, Worldfish, Unido and FAO are all working together with the seafood exporters association (BFFEA) and the Department of Fisheries (DoF) to improve the situation in the domestic supply chain.
Processors and exporters in Bangladesh complain that their only issue is that there is a lack of raw material supply. Farms should become more productive and an increased supply of raw material would strengthen the power of processors in the supply chain wiping out all malpractises that currently deteriorite the quality of the products. These malpractices mainly consist of pushing (inserting water to the shrimp in order to increase the weight) and other methods to manipulate the weight increasing the profit margins for various intermediaries but decreasing the profit margins for exporters and processors. In addition, if customers buy shrimp that is pushed their reputation will be in danger and this in turn impacts the image of the Bangladeshi sector as a whole. Although it is likely true that processors can become more selective in the products they purchase when there is more supply, it is not likely that an increased supply alone will solve all the issues Bangladesh is confronted with.
Niche markets for large size Black Tiger shrimp often have very strict demands on sustainability and food safety aspects. These aspects include e.g. traceability and strict control of hygienic conditions all along the supply chain. In the current supply chain model in Bangladesh both aspects are not controlled. Traceability is often limited to the middleman that is supplying the shrimp to the processor and hygienic conditions are not controlled as many middleman have no incentive to do so. The easiest way to better manage both aspects is to shorten the supply chain by linking farmers or farmer groups directly to exporters which provide farmers with necessary inputs which are otherwise provided by middleman. One example is the provision of ice to farmers. If farmers can put their harvest directly at ice this can greatly reduce post harvest loses and improve the quality of the products. Shorter supply chains do not only improve the quality and quantity of the products but also help exporters that are willing to move outside their factory boundaries to ensure supply of raw material. This is a main incentive for exporters that are now considering to actually engage in direct relationships with farmer groups that are supported by international organizations to improve their yields and farming practices. These initiatives undertaken by a partnership between BFFEA, Solidaridad and Worldfish can be a real breakthrough in improving the market position of Bangladeshi shrimp in the international market.
In addition to improving the situation in the supply chain and increasing production a big opportunity for Bangladesh would be to market the shrimp from it’s country as a premium product compared to Vannamei and Monodon produced in more intensive production systems. Marketing efforts dont have to be huge but should consist of branding the origin of the products (extensive production systems) and repairing the image of the Bangladeshi export companies. This should start with generating a flow of fact based information and improving the visual representation of Bangladeshi shrimp exporters on international trade shows like e.g. in Brussels or Boston. My organization together with Solidaridad and hopefully some other donors are ready to support the BFFEA and the Bangladeshi exporters in this aspect starting now.
Although at this moment, the exporters do not experience so much trouble with selling their products this situation may change when the global shrimp shortage is solved. Vannamei production is currently hampered by the outbreak of EMS. As a result, shrimp buyers are experiencing heavy competition for raw materials and prices have increased drastically. As a result all shrimp products are sold out. There is no need to put effort on marketing the product. It is expected that production will recover in the coming two years and if this happens buyers will turn to the cheaper raw materials in Vannamei producing countries or Monodon producers that are known for the good quality of the product (Vietnam / India). For Bangladesh the challenge will be to position itself as a premium shrimp supplier not based on the cheap price (which results of GSP status and 10% export subsidy) but on the supreme almost natural characteristic of its Black Tiger shrimp. The value proposition must be finetuned based on the characteristics of primary production and the best matching and most potential market segments in the international market.
If you are interested to know more about my work in Bangladesh or of other organizations like WorldFish, Solidaridad, and FAO, please don’t hesitate to get in touch with me!
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