Photo: VASEP/FIS

Ecuadorian Shrimp Industry Thrives Amid Global Tariff Shifts, Posing Strategic Considerations for Vietnam

VIET NAM
Thursday, May 15, 2025, 06:20 (GMT + 9)

Riding a wave of increased volume and value, Ecuador's shrimp exports surge in Q1 2025 by strategically diversifying markets and focusing on value-added products, creating both opportunities and challenges for competitors like Vietnam, according to VASEP expert.

Global Shrimp Market Analysis

Ecuador's shrimp industry has demonstrated remarkable resilience and growth in the first quarter of 2025, navigating a complex landscape of global tariff fluctuations and evolving trade dynamics. According to Ms. Kim Thu, a seasoned Shrimp Market Expert at the Vietnam Association of Seafood Exporters and Producers (VASEP), Ecuador reported impressive export figures, reaching 719.6 million pounds (approximately 326,400 tons) valued at USD 1.7 billion. This represents a significant year-on-year increase of 20% in volume and 33% in value.

With an average export price of USD 2.42 per pound, Ecuador continues to solidify its position as a leading global shrimp exporter, showcasing its adaptability in a challenging international environment.

Strategic Market Restructuring Fuels Growth

Ecuador's success in Q1 2025 occurred against a backdrop of considerable headwinds for the global shrimp industry, including the imposition of anti-dumping (AD) duties, countervailing duties (CVD), and increasing trade barriers, particularly from the United States. In a strategic pivot away from previous heavy reliance on the Chinese market, Ecuadorian businesses swiftly restructured their export strategy. Notably, exports to Europe surged to 155.3 million pounds in the first quarter of 2025, marking a substantial 37% increase compared to the same period last year. This surge propelled Europe past the United States to become Ecuador's second-largest market, trailing only China.

This strategic shift is exemplified by major players like Diosmar, which reportedly reduced their exports to China from a dominant 70-80% to a more balanced 20-30%, while simultaneously significantly boosting exports to both the United States and Europe. Despite facing tariff barriers in the US, Ecuador benefits from a comparatively lower 10% tariff under the Trump administration’s preliminary reciprocal tariff announcement, offering a competitive edge over key competitors such as Vietnam, India, and Indonesia, all of which face higher reciprocal tariffs also at 10%.

Value-Added Focus: A Key to Market Retention

A crucial element of Ecuador's competitive strategy lies in its increasing focus on developing value-added shrimp products. This includes a range of processed options such as peeled shrimp, cooked shrimp, de-veined shrimp, PUD (peeled undeveined) shrimp, HLSO (headless shell on), and premium packaging tailored to meet the demands of high-end consumers in the US and European markets. This emphasis on higher-margin products has proven particularly successful in the US market for peeled shrimp, where Ecuador's market share has impressively grown to 24% by early 2025 (up from 10% previously), while India's market share has seen a corresponding decrease from 64% to 55%.

Government and Industry Synergies

Ecuador's shrimp industry also benefits from proactive government support policies and well-defined industry development strategies. These include tax exemptions and reductions, streamlined customs procedures, active promotion of Free Trade Agreements (FTAs) with the EU, tax reduction agreements with China, and ongoing negotiations to expand market access in ASEAN countries.

Furthermore, the Ecuadorian shrimp sector operates with a strong emphasis on vertical integration, managing the entire value chain from hatcheries and farming to processing and exporting. This integrated approach allows for better control over genetics, feed quality, and disease management. Complementing this is a strategic imperative to reduce dependence on the US and Chinese markets by actively increasing exports to the EU, Middle East, and Asia-Pacific regions. The industry also prioritizes building a sustainable brand image, emphasizing certifications such as ASC (Aquaculture Stewardship Council) and BAP (Best Aquaculture Practices), and actively promoting its "green shrimp" credentials.

Potential Headwinds

Despite its current success, the Ecuadorian shrimp industry faces significant challenges. The Southern Shrimp Alliance (SSA) has levied serious accusations, including allegations of illegal mangrove deforestation, the use of forced and child labor, and the receipt of non-transparent financial support from the World Bank. These allegations pose a considerable threat, potentially leading to the imposition of additional CVD tariffs in the US market, which could erode Ecuador’s current competitive advantage and create opportunities for other exporting nations.

Strategic Implications for Vietnam's Shrimp Industry

In light of Ecuador's growing competitiveness and the high tariffs imposed by the US on other major shrimp exporting countries, Ms. Kim Thu of VASEP highlights the urgent need for the Vietnamese shrimp industry to implement strategic changes to safeguard its market share and enhance export turnover. Key recommendations include:

• Restructuring Export Markets: Reducing over-reliance on large, policy and price-sensitive markets like China and the US, while aggressively increasing market penetration in Europe – a region with growing shrimp imports and fewer tariff barriers. Focusing on promising markets such as Japan, Korea, Australia, Russia, and the EU, leveraging Vietnam’s high-quality shrimp that meets stringent food safety and traceability standards. Specific opportunities exist in Australia (average export growth of 25.2%/year due to CPTPP and high demand), Russia (growth of 34.7%/year, tax exemptions under EAEU, and convenient logistics), and the EU (Germany's stable demand, Belgium as a logistics hub, EVFTA reducing taxes to 0%, and EU consumers' preference for processed, ASC/MSC-certified shrimp).
• Promoting Value-Added Products: Shifting focus towards the production of deeply processed shrimp products like peeled, steamed, and Individually Quick Frozen (IQF) shrimp to align with the preferences of US and EU consumers. Investing in advanced processing technology and adhering to stringent food hygiene and safety standards to meet high-quality requirements.
• Demonstrating Transparency and Sustainable Development: Proactively providing transparent information regarding supply chains, labor practices, and environmental stewardship. Enhancing sustainability certifications (such as ASC and BAP) to bolster credibility with major international importers.

Ms. Kim Thu concludes that Ecuador’s rapid adaptation to market fluctuations through diversification, technological innovation, and value-added investments serves as a crucial lesson for Vietnamese enterprises. Only through flexible strategic shifts, cost optimization, and the development of sustainable brands can Vietnamese shrimp effectively increase export turnover, expand market share, and achieve sustainable growth in the competitive international market.

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