Shrimp farmers and processors in Bangladesh have sunk into hard times after a slump in demand and depreciation of major exporters’ currencies, reports The Daily Star.
Industry operators said many buyers have pushed back the shipment of their orders, while a section of them are even seeking discounts. As a result, the stockpiles are rising at the processors’ end.
“Exporters in these countries are offering very low prices,” said Khan Habibur Rahman, deputy managing director of Lockpur Group.
A pound of black tiger shrimps is now selling for $6.5, which was $9.2 as recently as two months ago, said Shoyeb Mahmud, general manager of Jahanabad Seafood.
So dire is the situation that many buyers are renegotiating prices of already-placed orders, he said, adding that stocks are piling up in almost every factory. The sinking euro and the recent slide of Russian ruble against the US dollar have made things worse.
The ruble has lost 60% of its value against the dollar since the beginning of the year, hit by Western sanctions over Russian’s support for the separatist insurgency in Ukraine and the fall in oil price.
The two currencies’ slide increased the import costs in Europe and Russia, which together account for nearly 75% of the country’s shrimp exports, said Amin Ullah, president of the Bangladesh Frozen Foods Exporters Association (BFFEA).
“We are completely stuck. Many buyers have totally stopped buying. And the tension in Ukraine instigated by Russia has compounded our woes,” Ullah said.
Many of the buyers have asked local processors to halt the shipment of previous placed orders and some have even withdrawn orders, he said.