17 de junio 2024
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The systematic decline in shrimp farming production in Nicaragua, which began in 2023 and continues in 2024, has led to the closure of shrimp farms on the country’s Pacific coast. This has forced those who worked there, both employees and employers, to seek other jobs to support their families.
In 2022, Nicaragua produced nearly 69.5 million pounds of shrimp. However, there was a drop of 27.4 million pounds (39.4%) in 2023, ending that year at 42.1 million pounds, according to data from the Central Bank of Nicaragua (BCN). This trend was already evident by November 2023, when statistics up to August reported a 39.5% decline, which barely changed with the addition of the third-quarter data.
The forecast for 2024, presented in the National Plan for Production, Consumption, and Commerce, predicts another 39.9% drop, ending at 25.3 million pounds. If this forecast is met, it would mean an accumulated decline of 63.6% in just two years. The 2023 National Plan also predicted a decline in shrimp production.
Why is shrimp farming production falling in Nicaragua?
The explanation for this phenomenon includes climatic, tax, political, and global trade reasons. This has led many people, like Benjamín, a producer from Chinandega who agreed to speak with CONFIDENCIAL under the promise of anonymity, to reduce his farming areas by 75% while supplementing his income with transportation work.
“My farm is semi-abandoned, with problems with the pump and the motor. With everything getting more expensive, I can no longer afford to complete the full farming cycle,” he said. He added that he decided to buy eight quintals of feed to plant two hectares, finding that the quintal, which he used to buy for 35 dollars, now costs 60 dollars, a 71.4% increase.
He notes that it might not matter if the purchasing companies had updated their prices proportionally, but that's not the case. Benjamín reports that prices have barely changed: size 91 is still paid at 60 córdobas (1.62 USD) per pound. This unit of measure means there are 91 tails without heads, per pound. Size 81 is paid at 65 córdobas (1.76 USD). Size 51 is around 70 or 75 córdobas (1.89 to 2.03 USD), and size 51 was about 100 córdobas (2.70 USD). Additionally, when delivering the product, the processing plant charges them income tax, a municipal tax, and processing costs.
More expensive shrimp feed
On February 27, 2023, the Nicaraguan branch of the U.S. multinational food company Cargill informed its customers that the governmental Institute of Agricultural Protection and Health (IPSA) had notified them of the cancellation of the sanitary registrations of their shrimp feed brands.
They also suspended the necessary authorization to “produce medicated and non-medicated shrimp feed at the plant located in Nicaragua until complete separation of the line is executed.” Although at that time they said they were “seeking the best short-term alternatives to resolve this issue with the relevant authorities,” the situation remains unchanged more than 16 months later.
Much remains the same for Cargill but the situation has worsened for farmed shrimp producers, who now have to import feed for their animals from Honduras, which also explains why they have to pay more for a quintal of the same product.
"The price [of shrimp feed] has risen significantly for farms that have to buy it in Honduras, so this cycle will also be bad for the country because the larger shrimp farms did not plant this year," said another producer from Chinandega who agreed to speak under anonymity and now works as a restaurant employee.
CONFIDENCIAL also spoke with a merchant who supplies aquaculture materials from Honduras to the shrimp farms that are still operating. “I can tell you that there is indeed a shortage of feed in the country,” he said. Although there are companies that import it from Peru, Guatemala, and Ecuador, “the feed arrives at a very high price in Nicaragua: between 58 to 60 dollars per quintal (when just two years ago it cost 38), and very scarce, with very little feed,” he detailed.
As a result, he is selling about 15% of what he used to sell because “as we all know, current prices do not allow for purchasing the full logistics for production because there are no prices to compete in the markets afterward,” he commented. He added that this is part of a global shrimp price crisis that also affected sales in Honduras and Guatemala because “this is not local, but global.”
He explained that the behavior of shrimp farming in Honduras is similar to that in Nicaragua, with the difference that a larger proportion of production in Honduras is sold in local markets, providing an additional outlet for the product “but even so, sales are at around 50%.”
The collapse of shrimp farming in Nicaragua
There was a time when shrimp farming in Nicaragua was such a good option that the sector grew every year, reaching about 20,000 hectares, according to data provided by Benjamín, who defines this period as from 2010 to 2014 when “there was some growth. Not on a large scale, but some, and since then, many farms have been closing.”
Things started changing in 2015 when, “instead of development and growth, there were mortality problems, partly due to climate change, which caused what we call frosts.” He adds that diseases caused by viruses — which affect creatures as fragile as shrimp — resulted in “sometimes more than 50% of the larvae dying. Many people closed, and others sold to the bigger ones.”
He also recounts the current disaster, noting that “after 2018, there was a great decline, with most large farms closing.” He adds that some “have continued operating with a few ponds; there are no longer any larval laboratories where one can buy in Nicaragua, and larvae have to be imported from Honduras, as well as feed.”
The forecast in the National Plan for Production, Consumption, and Commerce, which predicts a 39.9% decline for 2024, ending at 25.3 million pounds, seems to be on track for its unfortunate fulfillment, as confirmed by the official BCN statistics.
A comparison of data from the first quarter of 2024 with the same period in 2023 shows a decline that only deepens month by month. If the 3.6 million pounds farmed in January represented a 36.5% drop compared to the nearly 5.6 million harvested a year earlier, the February and March data only worsened.
In February, 1.7 million pounds were harvested, which was 44.8% of the 3.1 million pounds in February 2023, while in March, the drop was 54.3%, closing the quarter with a deficit of 4.9 million pounds, 42.96% less than the 11.4 million pounds in the first quarter of the previous year, which was already lower than the first quarter of 2022.
Although he trusts that his transportation business will continue to meet his family's needs, Benjamín does not give up on trying, even on a small scale. “What we have is not much: just two hectares out of the eight I had,” he reiterated, “but I have to try.”
This article was published in Spanish in Confidencial and translated by our staff To get the most relevant news from our English coverage delivered straight to your inbox, subscribe to The Dispatch.
