Royal Caridea is committed to industry best practices of sustainable shrimp production, marketing, and distribution. Our commitment is to shrimp sustainability by adhering to and continuously employing the principles of shrimp sustainability — the continuous efficient use of resources (i.e., land, water, feed, farm by-products, labor, and capital) to grow generations of healthy, natural, nutritious shrimp and doing so without the erosion of our planet’s resources.
Royal Caridea Shrimp —
Repeatable Production, Resource Conservative, Natural, Nutritious, Healthy Shrimp
Shrimp Industry:
Sustainability
- Shrimp is a profitable industry with strong market fundamentals. Accordingly, investing in the shrimp supply chain has the potential to create significant returns for investors in spite of high risks.
- Investors in this space are predominantly informal, and operate outside of commercial debt and equity markets. They range from individual entrepreneurs looking to diversify, processors and exporters looking to expand and access higher value markets, domestic commercial banks seeking foreign currency in volatile political environments, and large multinationals seeking to secure greater stability in supply or long term demand for their products (e.g. feed).
- Like the rest of the seafood industry, transactions throughout the supply chain are opaque (this is an issue that SIMP is trying to address), with more informality closer to production (cash, in kind, lines of credit from input suppliers) and more formality (contracts with terms of payment) closer to retail. (It is well known that Indian shrimp is being shipped to Vietnam, processed and put into the market place as a Vietnamese product. China has worked to deal with smuggled Vietnamese product).
- Sustainability interventions add costs to shrimp production, and are not perceived as essential to core business. Quality broodstock , quality feed higher in non fish ingredients, water quality testing, and automatic feeding technology are all interventions associated with positive environmental outcomes in farms. However, they reflect additional costs to production and are not always perceived as a part of a core business model.
- Processors in Ecuador are a key leverage point for intervention, as they aggregate production and increase the margin through value addition. Certification and technology can contribute significantly to that value. This trend was not observed in Asian markets, which dominate production. Ecuador has seen consolidation of its shrimp industry and investment in better management after years of disease. Vertical integration is emerging as a viable business in the face of low cost production from Asia.
Current Farmed shrimp practices have significant sustainability concerns
A new report released by the Sustainable Fisheries Partnership on 12 December indicates that the world’s farmed shrimp production has lingering sustainability concerns with little improvement likely on the horizon.
The new report, which is a part of SFP’s “Target 75” initiative, classifies just 8.8 percent of the global production of farmed shrimp as “improving,” and none is classified as sustainable under the Target 75 standards. The major shrimp production regions that were assessed – China, Ecuador, India, Indonesia, Thailand, Vietnam – all have high chances of supply chain disruption and have significant sustainability concerns, according to SFP.
“The report highlights the need to work collaboratively across the supply chain to launch aquaculture improvement projects at the zonal scale and improve aquaculture governance,” Casey Marion of Beaver Street Fisheries said.
The biggest target for sustainability improvements, according to the report, are export-heavy markets that engage with countries more actively concerned about sustainability.
“This includes Ecuador, India, Indonesia, Thailand, and Vietnam. Together, these production regions account for 2.1 million metric tons, representing almost 42 percent of global production,” the report states.
Even with improvements to those markets, improvements in China will be necessary to achieve the Target 75 goal, according to the SFP. The country produces 2.2 million metric tons of large farmed shrimp, accounting for 45 percent of the sector on its own. The majority of that shrimp stays within the country’s borders, which means outside market pressure won’t be able to influence the industry.
Current Farmed shrimp practices have significant sustainability concerns
“Most critical is that suppliers should be able to identify sources of shrimp to the province/state of origin, in order to better understand the risks in any given supply chain,” the report states.
To that end, report calls for the countries with high shrimp production – particularly China – to publish state-level licensing and relevant environmental impact assessment outcomes, water quality information, and more. It also calls for improved licensing and permitting processes that require environmental impact assessments for new producers, including small-scale producers.
Despite the relatively poor numbers, there are signs of improvement. While just 8.8 percent of farmed shrimp is classified as improving, that’s an increase of nearly 62 percent from 2016, when just 5.5 percent was classified as improving.
“This increase is due to an increase in the number of certified farms, as well as better-quality data being provided to SFP by [the Aquaculture Stewardship Council] and GlobalG.A.P.,” the report states.
In addition, several efforts are ongoing to improve the shrimp trade, including the Seafood Task Force, the Asian Seafood Improvement Collaborative, and efforts from by Sustainable Fisheries Partnership itself.
“At first glance, the numbers appear bleak and highlight the scope of the challenge,” SFP CEO Jim Cannon said. “We’ve launched an Aquaculture Supply Chain Roundtable to create a simple platform to engage industry, and as a first step retailers and importers should begin asking one question of their supply chain: Which province does my shrimp come from?”