Small but promising LatAm shrimp suppliers: Venezuela, Peru and Honduras

September 16, 2021

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ShrimpTails Inbox Articles

Edition seven of 2021

Reading time: 13 min

In Latin America, Ecuador takes the lead in shrimp exports and production. However, neighbouring countries have also been striving to increase their global market access and become more competitive by making their production and supply chains more efficient.

In this article, we look at three small but promising Latin American shrimp suppliers, namely Venezuela, Peru and Honduras. We dive deep into their production, the trade routes their shrimp take to the markets and the accompanying challenges and opportunities.


Venezuela: shifting from HOSO to peeled shrimp
With the ongoing economic crisis in Venezuela, food exports – including shrimp – have been a way for the country to gain some stability. In fact, the Venezuelan president has loosened restrictions on exports to allow more shrimp to be shipped abroad. Venezuela’s production, according to the FAO’s latest data, has been on the rise. In 2019, it reached an estimated volume of 22,000 tonnes, a 500-tonne increase compared to 2018. And estimates on the ground are even higher for this year. According to an industry source, the shrimp harvest is expected to reach 45,000 to 50,000 tonnes in 2021, and up to 80,000 tonnes in 2022.

Venezuela is not a huge shrimp exporting country, but it is an adaptable one. More than a decade ago, Venezuelan farmers were only farming larger sizes of shrimp (30-40 or 40-50 count per kg). However, when the Taura syndrome virus (TSV) hit Latin America in the 1990s, many countries were affected, including Venezuela, Ecuador, Colombia and Peru. Venezuelan farmers consequently faced huge production losses which prompted the development of a new genetic strain of shrimp. This strain is more resistant to the virus but has a slower growth rate. This caused Venezuelan farmers to grow smaller sizes of shrimp and have 5-6 cycles per year. Today, Venezuela’s production specializes in smaller sizes.

Most shrimp farms in Venezuela are vertically integrated, giving farmers a high level of control of their supply chain. In order to access new and established markets that require certification, some producers also aim to obtain sustainability certification, such as that of the Aquaculture Stewardship Council (ASC), which promotes responsible farming practices. Certified sustainable seafood is increasingly demanded amongst European and US retailers. Currently, Venezuela has four ASC-certified processing plants: Grupo Lamar, Lago Pack, Alimentos Mar Caribe and Industria Zuliana de Alimentos.

With a high availability of smaller sizes in their production, Venezuela found good demand from Europe’s processing plants.

Latin American countries have also been striving to increase their global market access and become more competitive by making their production and supply chains more efficient.


While Venezuela mostly produces head-on-shell-on (HOSO) products, in recent years, Venezuelan shrimp producers have also added peeled pulled vein (PPV) products to their portfolio. This was not an easy shift for many Venezuelan companies as peeling is expensive in Latin America compared to Asia. However, to obtain more stable market access, some companies have included this processing step in their operations.

About 90% of produced Venezuelan shrimp is headed for Europe or Asia. After these products are processed in European cookeries or the processing industry, they are then sold mostly to supermarkets and, to a lesser extent, to the food service industry. Venezuela does not have a Free Trade Agreement (FTA) with the EU, which makes only the export of raw materials tariff free. Otherwise, a 12% tax applies. Traditionally, Venezuela’s main market is southern Europe, particularly France and Spain. In 2020, southern Europe imported 18,360 tonnes from Venezuela, a mere 457 tonnes less than in 2019. This illustrates that the market has remained relatively stable throughout the COVID-19 year.

ShrimpTails spoke to Jose Rincon of Grupo Lamar, a company that exports 80% of its production to Europe. “Certain French and Spanish HOSO cookers were the first to come looking for our products, mainly due to the darker colour our shrimp has compared to that of most other suppliers,” Rincon said. “When we became ASC certified, it helped solidify our position. Cookers in Europe have grown accustomed to our A3- and A4-colour shrimp, as it is visually appealing to their end customers.”

Shrimp exports of Venezuela, Honduras and Peru based on export and import data from various sources under 03061792 and HS160521/29
Rincon explained that in recent years, however, peeled products have become more in demand in north-western Europe, particularly in Belgium and the Netherlands. With Grupo Lamar’s products being ASC certified, these European markets were easy to reach.

“At first, we were against peeling after we did our cost analysis,” Rincon explained. “But then we started doing small volumes and started investing in training new staff and other new technology. We did not drop our HOSO sales in southern Europe, and we continued gaining market access in north-western Europe over the last year.”

Today, Grupo Lamar is peeling 50% of its production to meet this demand. Recent trade data also illustrates this growth in sales, as imports from north-western Europe increased from 1,368 tonnes in 2019 to 2,529 tonnes in 2020.

Apart from Europe, Venezuelan producers are also pinning their hopes on a newly established market which could be a gamechanger. In 2020, Venezuela shipped its first containers of farmed Pacific white shrimp to China after the country approved its veterinary health standards in 2019. Venezuelan producers are hoping that this could open new doors and provide more opportunities for the shrimp industry. However, securing the permit came at an unfortunate time: China has been strengthening its restrictions and inspections of imported frozen shrimp. In 2020, China’s imports from Venezuela were registered at 3,817 tonnes.
Peru: catering to high-quality market
Peru’s history with fishing dates back thousands of years to the pre-Inca culture, when the first settlers built their homes around the coastal areas. Peruvian shrimp aquaculture developed due to the country’s diverse geography and beneficial climate. But the Peruvian shrimp sector was widely impacted by El Niño in 1998 and white spot syndrome outbreaks in 1999. Nevertheless, the industry was able to recover, with many shrimp producers intensifying and modernizing their production systems to manage and reduce risks.

The country’s aquaculture production currently ranks fifth in South America, with 3,000 kilometres of coastline and high-yielding bodies of water, according to Alfonso Miranda Eyzaguirre of the National Society of Industries. FAO data shows that Peru’s shrimp production has increased by 46% to 43,480 tonnes between 2018 and 2019.

An important part of Peru’s shrimp production is based on hyper-intensive shrimp farms with typically three cycles per year. These hyper-intensive systems are usually 0.5 hectares with a stocking density of 300 post-larvae per square metre. Peru has two major shrimp producers which cover more than 50% of production: Marinasol and Ecoacuicola. Both companies are linked to investors who also have interests in agri-businesses focusing on other crops, such as avocados, table grapes or blueberries. This allows them to use comparative models across different crops and apply knowledge gained in other industries to the aquaculture sector (just like with the Avocado marketing model). Moreover, the hatchery sector of Peru is not too well-developed compared to other Latin American countries. While Marinasol has its own hatchery, most of the larvae in Peru are imported from Ecuador.

Looking at the market, Peru’s shrimp exports have grown rapidly in recent years. In 2020, they reached 32,951 tonnes, a surge of 79% compared to 2016. Peru’s main markets include the US (35%), South Korea (18%), China (10%) and Spain (9%).

“One of the main challenges of the Peruvian shrimp sector is finding a path for growth and a unique position in global markets. Being a small and developing sector (compared to other production sectors in Peru), the industry was strongly impacted by the low global shrimp prices, which did not encourage shrimp producers to invest more in production,” Allan Cooper, Business Development Director of Vitapro-Nicovita said. “However, as prices increase, we hear that farmers are becoming more enthusiastic. Farms which had partially closed due to the low pricing and impact of the pandemic are now resuming operations.”

While the presence of Peruvian shrimp in the US has been historically strong, the rapid growth of the South Korean market is an interesting development in the Peruvian shrimp market. Imports from South Korea grew by 179% from 2019 to 2020, reaching 6,047 tonnes in 2020. As South Korea is notoriously known for its high-quality requirements for shrimp, Peru’s entry into this market has not been easy. In a recent ShrimpTails article on niche Asian markets – such as South Korean market – we discussed that Korean importers usually purchase A3-A4 HOSO shrimp in the sizes of 30-40, 40-50 and 50-60 count per kg as customers typically associate these traits with freshness and good quality.

Today, the US and South Korea remain strong markets for Peru. And while export volumes are not as big as in Ecuador, exporters are competing in the niche category.

Honduras: certified sustainable products key to success

Honduras is a Central American country with Caribbean Sea coastlines to the north and the Pacific Ocean to the south. Its shrimp industry started in 1969 with an investigation by the government into the feasibility of shrimp farming. Aquaculture production then kickstarted in 1984 with the help of national and foreign investors. According to FAO data, Honduran production has been growing slowly but surely. In 2019, it reached 32,100 tonnes, 28% more than in 2015.

Pacific white shrimp farms in Honduras use semi-intensively managed ponds. Low stocking densities are used and encouraged to help reduce occurrence and severity of disease outbreaks. The main disease issues reported in Honduras are the TSV and the white spot syndrome virus. However, due to the country’s strict sanitation protocols and regard for environmental impact, diseases are less prevalent today.

According to the National Association of Aquaculturers of Honduras (ANDAH), the country’s shrimp industry is composed of 420 shrimp-farming projects that cover an approximate production area of 24,500 hectares. Most of the output is destined for export, with an annual average of circa 30,000 tonnes. Around 20% of the area that was developed for farming is handled by the traditional small and medium-sized sector, while 80% (19,600 hectares) belongs to larger companies that apply semi-intensive technology and have 2 to 3 cycles per year. This results in a production of between 680 kg to 1,360 kg per hectare per cycle.

Honduran producers have a strong commitment to sustainability. The country currently has 10 ASC-certified Pacific white shrimp companies. An increasing number of investments toward a more sustainable industry is being made through partnerships with ASC; the World Wildlife Fund; and IDH, The Sustainable Trade Initiative. Apart from sustainability, traceability is another key feature of some Honduran companies, such as Granjas Marinas. With the help of Identigen, the company uses DNA traceability technology to trace and track its shrimp with the aim of increasing the transparency in their supply chain.

Production in Honduras mostly focuses on large HOSO shrimp. Honduran shrimp is also known for being transported live, during which it undergoes a process called “mimitisacion”: it changes to a darker colour due to stress. Because many Honduran companies are vertically integrated, they find live transportation to be easier. This process is mostly used by producers catering to the requirements of the Taiwanese market which prefers its shrimp darker.

The main markets of Honduras include Taiwan, Europe, the US and other Latin American countries such as Guatemala, Mexico and Costa Rica. Almost three decades ago, Honduras signed an FTA with Taiwan, allowing it to export shrimp to the Asian country. As mentioned in our previous ShrimpTails article, the Taiwanese have a strong love for seafood and high-quality products. With its solid shrimp farming capability, Honduras has become Taiwan’s top supplier. Taiwanese buyers also usually prefer brightly coloured A3 or A4 shrimp.

CACESA, one of the largest shrimp producers in Honduras, caters to the Taiwanese market. “Taiwan is a quality-driven market for HOSO and PPV products. During the pandemic, we have been able to keep our usual production because demand did not slow down our exports,” Carlos Virgilio Umanzor of CACESA said.

Another major market of Honduras is Europe, particularly north-western Europe. In 2020, the region imported 7,659 tonnes from Honduras. The strong presence of Honduran exporters in north-western Europe could be attributed to the wide availability of ASC-certified products in Honduras and companies focusing on sustainability. Southern Europe, albeit a smaller market than north-western Europe, also imports some quantities from Honduras: in 2020, import reached 1,283 tonnes.



Looking ahead: sustainability is key

Each of these countries in Latin America has its own unique selling points and its own set of challenges and opportunities.

In Venezuela, the ongoing economic crisis combined with fuel shortages have been increasing costs for farmers. Many raw materials, such as for packaging or feed, needed to be imported. Logistics have also been difficult due to delays and less shipments. Stronger restrictions on logistics and social gatherings led to a lowered production output over the past year. 

However, with its diversification of products and more companies becoming ASC certified, Venezuela proves to be an attractive supplier for markets, particularly in Europe. Production of peeled shrimp can increase rapidly as markets demand more of this product and companies also invest in their peeling capacity. Remember that Venezuela has also started catering to newly established markets such as China, which could present interesting opportunities for the country.

 

With all these factors, Venezuela’s production has potential to increase in the coming years.

Meanwhile, increasing Peru’s shrimp production in the short term will not be easy due to political transitions combined with the ongoing COVID-19 crisis. In the long term, however, with more investments in production and modernizing feed solutions, combined with strong demand from new markets such as South Korea and China, Peru’s shrimp industry can take off rapidly.

“We see that Latin America has a huge potential to grow production with the help of technology and feed solutions that really understand the market,” Cooper of Vitapro-Nicovita added. In Peru and other Latin American countries such as Mexico, Honduras, Nicaragua and Ecuador, Vitapro, owner of Nicovita, is currently working on providing aquafeed solutions and modernizing production. It does so through innovative feed solutions and processes, developing artificial intelligence and digital ecosystems that will make production more cost-efficient and sustainable.

Finally, in Honduras, both local and external challenges pose difficulties for producers. At the farm level, these are the rising feed and diesel costs. The high freight and shipping costs also remain a challenge. However, with a continuous aim to increase sustainability and transparency in the sector, combined with a strong niche demand, production in Honduras is likely to grow and flourish in the coming years.

Click the image to view infographics in full screen
Click the image to view infographics in full screen
Sustainability is key to improving shrimp production in Latin America and opening up market opportunities. A step in the right direction is ASC’s partnership with Vitapro as of February 2021, aimed at encouraging responsible practices in the Latin American shrimp industry. As part of the agreement, Vitapro will develop workshops and training sessions for aquaculture producers in Latin America, helping large, medium, and small producers improve their production practices and obtain ASC certification.

These countries prove that while their production may be small, they have huge opportunities to learn, adapt to the current challenges and grow. Can they compete against big suppliers in Asia? For now, their market shares remain small. But with the right mix of opportunities and improvements, Venezuela, Peru, and Honduras can become promising competitors in the global shrimp markets.

For now, their market shares remain small. But with the right mix of opportunities and improvements, Venezuela, Peru, and Honduras can become promising competitors in the global shrimp markets.

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Photos used in this article are courtesy of Grupo Lamar.

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