The Shrimp Crisis-Again
High Fuel costs, abundance of farmed shrimp, over fishing and inability to develop new sales markets has made the 2006 shrimp season one of the worst ones in History

January 1st, 2007
by Thomas Tomczyk

[private]

High Fuel costs, abundance of farmed shrimp, over fishing and inability to develop new sales markets has made the 2006 shrimp season one of the worst ones in History

High Fuel costs, abundance of farmed shrimp, over fishing and inability to develop new sales markets has made the 2006 shrimp season one of the worst ones in History

The current shrimp season is hurting Bay Islands businessmen particularly hard. Out of the 56 registered shrimp boats, a third has not left port and the crisis, affecting also packing plants, is likely to get worse, before it will get better at all.

The 2006 shrimp crisis is affecting the entire eastern Caribbean. As much as a third of Honduras, Nicaragua and Columbian shrimp boats are standing idle. To avoid the high competition and high fuel prices some Bay Island fishermen took their boats to San Andres and now fish there. The situation isn’t much better there either. Columbian fishing banks, estimated to support 10-15 vessels now support 30 licensed boats.

Shrimp crisis has hit US as well. A 70′ shrimp boat that a few years ago cost $300,000 can still be picked up for $50,000. It is a buyers market and a few Bay Islanders have bought boats hoping for the shrimp prices to go north.

APESCA estimates that 80% of boat owners have defaulted on their bank loans. “We are paying one of the highest interests on business loans in the country – 19 percent,” said Steven Guillen, APESCA secretary. APESCA officials believe the government needs to step in and ease the financial stress that the fishermen are feeling. “We need a two year grace period, 10% loans and 10 years to repay,” says Dave Jones, president of APESCA.

The dependency on the US shrimp market only complicates the Bay Islander shrimp industry situation. With mainland Honduras sales still being insignificant, the only licensed EU packing plant is in the south of the country and shipping the product from the Atlantic is not cost effective.

Europeans pay more for shrimp and they require a ‘near perfect’ shrimp with its head still intact. A few packing plants attempted to diversify and sell their product to Europe, but the switch requires better quality shrimp and an expensive accreditation process of a packing plant. One local fisherman did try to export shrimp to Europe in 2006, but with around 70% of the shrimp being rejected this ended up a losing proposition.

At Lps. 49 a gallon, the Honduran government official diesel price, the fishermen are actually paying two Lempiras less than in 2005. The abundance of the farmed shrimp has led to a drop in demand for wild shrimp.

Another reason for the crisis is excessive competition dating back to 2005, According to Dave Jones, director of APESCA, the 40-50 boat fishing licenses granted during the last year of the Maduro presidency flooded the market. “Too many boats were competing in too small of an area,” said Jones. “We [APESCA] opposed granting any new licenses.”

Using between $500 and $750 of fuel a day the shrimp industry’s operating costs have skyrocketed in the past three years. A shrimp boat that only fishes at night uses 200 gallons of fuel. If it also works in the day time then that’s another 100 gallons.

“For every pound of shrimp I caught I would need to spend one gallon of fuel. With the fuel prices up and shrimp prices at Lps. 40-45 we can’t make any money,” says Jones. It is surprising that anyone in Honduras is still even fishing for shrimp. With only three out of 10 packing plants even buying fishing product. Waiting for better times, some packing plants only buy enough product to pay their electric bill and salaries of indispensable employees.

If the trend continues, and all signs point that it will, 2007 will be another disastrous season for Bay Island Fishermen. The number of loan defaults is likely to increase leading to bankruptcies, unemployment and half the fleet not even leaving port. [/private]

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