Yangon Weather Forecast, Burma

Shrimp industry battles through external challenges

SHRIMP exporters are increasingly relying on uncertain wild catch as once-booming shrimp farms continue to decline.

Buffeted by sanctions, the lingering after-effects of Cyclone Nargis and the global recession, shrimp farms began to go downhill in 2004, after several years of good business, exporters said.

“Starting from 1998, shrimp farms boomed until 2003. But now shrimp exporters rely on wild catch,” said U Hla Maung Shwe, chairman of the Myanmar Shrimp Entrepreneurs Association.

“At its peak, from 1999 to 2003, Myanmar was the fourth largest exporter to the US market after Vietnam, Thailand and Philippines,” he said. “At that time, 95 percent of farmed shrimp went for export.
“Now, only 20pc is exported, and what is left is consumed locally,” said U Hla Maung Shwe.

“The US market accounts for 50pc of global shrimp consumption. We lost a big market in 2003” because of sanctions, he added. Myanmar still exports to China and the European Union (EU), two major world markets.

But the stiff competition Myanmar faces from competitors like Thailand and Bangladesh is compounded by high taxes.

“The EU imposes 13.7pc tax on Myanmar and Thailand but Bangladesh is untaxed. The Thai government refunds 7pc to its exporters if they export to the EU. By contrast, Myanmar exporters pay 13.7pc to the EU and another 10pc to the Myanmar government,” said U Hla Maung Shwe.

“My factory rarely gets shrimp from farms. We have to use wild catch, and it amounts to about 60pc of our exports,” said U Tun Aye, managing director of Shwe Yamone fish processing company.

Shwe Yamone is one of eight fish processing factories in Myanmar that meets EU standards.

“Shrimp farming is riskier than fish farming because the shrimp are less resistant to disease, which means losses can be very high if there is a major problem.

“At the same time the initial investment is much higher than for a comparable fish farm. At a time like this when the market is quite slow, shrimp farmers cannot make much of a profit,” said U Tun Aye.

“When exporters don’t get enough stock to run their factories at full capacity, it increases our production costs. And then when we’ve finished processing the shrimp we still have to pay 23.7pc tax,” said U Tun Aye.

While the situation now is less than perfect, U Tun Aye said that happier days are not far away.

The potential for Myanmar’s shrimp is high because its product is free from chemical contamination, which makes it highly attractive to selective markets.

“We have great demand from Japan, where consumers are very aware of the risk of chemical contamination and they have confidence in our products.

“Our buyers there say they will not source their shrimp from Thailand and Vietnam if we’re able to meet their demand,” U Tun Aye said.

But U Hla Maung Shwe said the industry needed some help from the government to reach its full potential.

Regular section