An exploration of market trends and strategies for this “pride of Asia”
Producers in Asia still reminisce the black tiger Penaeus monodon, the species which spurred commercial shrimp farming in Asia from the mid-1980s. Production was decimated mainly due to white spot syndrome virus (WSSV) since 1996, and replaced with the domesticated specific pathogen free vannamei shrimp since 2002. A resurgence in the farming of the monodon shrimp in Southeast Asia, China and India came with the availability of specific pathogen free (SPF) broodstock in 2021.
With more production and a depressed market demand, power was in the hands of buyers, namely from China, Japan and Europe. Marketing issues dominated the discussion at the panel on “How to maintain the resurgence of the black tiger” at TARS 2023 in August.
The panel chaired by Dr Dean M Akiyama, Aquaculture Technical Advisor, Indonesia had two invited industry players – Catherine Lee, Shrimp Export Lead, Goh Siong Tee Marine Products (GST), Malaysia and Dr Yufan Zhang, China Aqua Business Development Manager, Alltech. Providing the background for discussions were two presentations. Dr Manoj Sharma, Director, Mayank Aquaculture recounted the challenges and costs of producing monodon shrimp in India, citing the dire situation with low ex farm prices for the shrimp. Regis Bador, Founder and CEO of Innov’Aquaculture from New Caledonia showed how monodon from Madagascar and Mozambique gained a foothold in Europe’s high end market.
Farming the monodon in India
Manoj has been in shrimp farming for 30 years, initially with the monodon shrimp and then changing to producing large vannamei and now reverting partially to produce monodon shrimp. He described the trajectory of both vannamei and monodon shrimp productions in India. He described 1985 to 2009 as the monodon era; 2009-2021 as the vannamei era and now we are seeing the resurgence of monodon farming with the new SPF monodon.
“A transformative phase was from 2011 to 2017, characterised by a remarkable surge in production. We called this the ‘vannamei tsunami’. Post-2017, the euphoria subsided, giving way to formidable challenges within the aquaculture sector. The industry is now grappling with a stark reality — a diminished farm success rate hovering around 40-50%, compared to a success rate of 85% in 2010,” said Manoj.
Internal challenges
While oversupply from Ecuador is a major challenge, in India, there is the rise in diseases, lower production success, and a 28% rise in input costs and all-time high costs for feeds and diesel. At the same time, farmgate prices have dropped by 30%. Manoj said, “In 2017 it was a party mode, everyone was making money in vannamei. But today, farmers are facing these major issues, and unable to reach break-even”
A predominant factor is the onslaught of diseases, with WSSV wreaking havoc across both vannamei and monodon shrimp farms. The high prevalence of Zoothamnium in low density monodon farming was attributed to years of high-density farming of the vannamei.
“The first crop of monodon in 2021 was very encouraging but there were WSSV outbreaks even in the summer months, when temperatures rose to 32-33°C. For both shrimp species, the high stocking density, high salinity, high temperature and higher organic loads, all combined leading to disease outbreaks.”
Production cost
While he conceded that the new SPF monodon is good on the production side, the issue is that it can only truly be sold above 25g. There is no value for emergency harvests. “Comparing costs of production, for counts/kg 30/40, be it vannamei or monodon, it is close to USD4/ kg. Survival and feed conversion ratio (FCR) are crucial, and we are at the mercy of nature in terms of production and market in terms of price,” added Manoj.
Monodon post larvae cost significantly higher at USD12- 14/1,000 PL than that of vannamei at USD3.5/1,000 PL. There is a call for indigenous brood stock and genetic lines to bring down the cost of post larvae.
Within India itself, infrastructure imbalances lead to challenges in cost efficiency. “Andhra Pradesh can sustain any industry shock due to better prices for small counts and lower cost of production. Post larvae prices are double in Gujarat, feed price 12% and electricity 6X higher,” said Manoj.
Large size for monodon
At farmgate prices of 20C of vannamei at USD7.3/kg versus monodon at USD6.5/kg (Table 1) the situation has been dire for monodon farmers who will then suffer from losses. However, in 2023, Manoj managed to make gains by pushing to size 12C/11C at very high prices. He explained that he managed to produce 100g shrimp which took 200-300 days and obtained a good margin when selling at USD16/kg. Quoting challenges such as carrying capacity and diseases, this was a one-off crop success.
The market crisis and a slow approach
A market crisis with low prices beckons a measured approach to monodon marketing. The suggestion is to offer branded, traceable, and certified monodon products.
“If India were to produce more monodon it would cause an oversupply. In contemplation of the future, we should increase domestic demand and augment per capita shrimp consumption. If we work together, even increasing 100g extra per capita, 1-2 million tonnes of shrimp will be consumed,” suggested Manoj.
There is a huge potential for domestic marketing in India. A market for sizes 16 to 25g should be developed in India itself as an insurance to emergency harvests.
Strategies for the monodon in India
According to Manoj, the maximum production in India as per current market situation is 40,000 to 50,000 tonnes of monodon. At more volumes, prices will fall.
Another suggestion is to “plan monodon culture in creek- based systems or other areas where vannamei culture is failing”. However, he cautioned that farmers will have to balance their production between vannamei and monodon and sustain species diversification. The advice is to farm monodon in high saline and high temperature conditions.
Call for unity in markets
Manoj said, “My appeal to all Asian shrimp farmers is to create a separate market platform for monodon shrimp – let’s market it as pride of Asia.”
Brand marketing the monodon: A lesson from the Colombian Coffee success
As global shrimp production surges, declining global prices particularly affect the livelihoods of Asian farmers as they face increasing production costs. Bador compared the current situation as strikingly similar to that of Colombian coffee, in the 60s-70s. This historical success story in a different industry was directed to the young farmers in this conference in marketing the monodon shrimp.
In the post-World War II era, Colombia had a huge stock of unsold coffee and in the1960s prices plummeted due to oversupply. Bador explained that “Only less than 5% of US consumers knew where their coffee was coming from. Furthermore, they were always using a blend and taking the cheapest sources”. The National Federation of Coffee Growers of Colombia (FNC) ordered an advertising campaign. There was a visionary marketing journey, creating the iconic Juan Valdez character and emphasising the unique qualities of Colombian coffee.
Brand identity
The success lay in brand identity, using a logo that showcased not just the product but the region where it was grown. This marketing strategy aimed to educate consumers on the distinct features of Colombian coffee, specifically Arabica which is known for its superior quality. The campaign effectively convinced buyers and consumers to choose progressively, 100% Colombian coffee.
They communicated their uniqueness not just through claims but by leveraging on gastronomy by working with famous chefs. One striking example involved a claim of respect for mangroves, low carbon footprint and shrimp welfare, rebranding shrimp as “le bijou or jewel” instead of just “shrimp.”
Madagascar’s and Mozambique’s monodon shrimp
In marketing into niche markets, two noteworthy success stories emerged – Madagascar’s and Mozambique’s shrimp. The two producers differentiate themselves in a competitive market with specific farming rules and limited stocking density. They invested in multiple certifications and told a real story about efforts and achievements on community welfare and environmental issues.
In Mozambique, it is a family story which intertwines with a commitment to community and environmental responsibility. By showcasing their dedication beyond mere inspections and committing to long-term trust-building with buyers and consumers, these shrimp producers set themselves apart.
In a world dominated by social media, storytelling has become pivotal. It is not just about being different but about fostering a human connection through community and environmental narratives. The key takeaway is clear— commitment, storytelling, and continuous communication are essential to building trust, not just with wholesalers and processors but with the end consumers. “Be fully trustworthy, strictly respect the chosen rules to be different and communicate all the required information on a regular basis.”
In a market where trust has waned, these success stories remind us that being distinct, ethical, and committed are not only possible but also profitable. Whether it’s through a familial narrative, environmental commitments, or unique branding, the shrimp industry in Asia has much to learn from the triumphs of Colombian coffee.
Market strategies for the monodon: Mass vs unique markets
The success in marketing monodon from Madagascar and Mozambique in high end markets, may not work for mass volume markets. “The point of my presentation was to give inspiration to some producers and stress the importance of niche markets. There are many places in the world such as in Dubai, where consumers are willing to pay a lot for special dishes with monodon shrimp produced under unique and different conditions.
Monodon producers in Malaysia, as well as other countries are dealing with pricing pressures. Lee does not see the prices going down and echoed the importance of selling the shrimp as a brand and exploring niche markets. “Recently, our value proposition is to sell cooked shrimp.
There is close proximity from farm to processing plant and we harvest live. We also have a unique project with Chinese buyers offering freshly peeled monodon shrimp with no soaking to Michelin starred high-end restaurants, targeting a premium market segment. The quantity and volume might be small. This is niche market for Malaysia that allows us to remain as active suppliers.”
More supply and domestic markets
China produces around 150,000 to 200,000 tonnes of monodon shrimp and almost 95% is consumed domestically. Zhang said, “I agree that it is imperative to know how much the market wants and the state of demand, which Chinese and other producers must figure out. Some 70% of monodon comes from Fujian province. Monodon farming used to be a goldmine with prices 5 times higher than vannamei shrimp. The cost of production is so high that it is mostly sold in tier-1 cities. For the consumer, monodon is just a bigger shrimp and with vannamei cheaper, monodon is losing out to vannamei.”
Trust is so critical for branding
With social media, people are always critical of misleading content, misinformed or is fake. “You also have to appreciate that this is the only form of content that people trust and it is the only way to reach the final consumer who will finally purchase the seafood. We cannot have the brand destroyed by a few,” said Bador.
Lee concurred that branding and perception is invaluable. One example was how the perceived value of monodon dropped with images of shrimp injected with gel in Vietnam which damage its reputation in China.
Expectations of markets
Akiyama asked the panel on their experiences with European, Asian and Chinese buyers. “In the European market, the emphasis is on certification and quality although it is still price sensitive,” said Lee. The premium can be USD30 cents/kg more when these standards are met. There are challenges exporting to Europe due to stringent requirements. Chinese buyers are extremely price conscious and wait for a market downtrend.
“Japanese buyers rely on direct relationships, trust- building, and frequent visits to ensure quality, rather than being particular about certifications. Internally they’ve done testing to determine freshness, and its correlation with taste. They know how to differentiate quality and would be willing to pay a premium price, such as for shrimp from New Caledonia. In my experience, they will pay USD30-50 cents/kg more because they believe that Malaysia produces higher and better quality.”
Zhang described how shrimp are consumed in China. “Large frozen shrimp is for barbecue and after applying strong soy sauce, everything tastes similar. Small shrimp is used for frying so it does not matter whether it is monodon or vannamei. Lastly, there is a demand for live shrimp where most restaurants still prefer to steam to keep the meat quality which gives the monodon a better chance to show its quality advantage. However, despite the demand for live shrimp, we cannot expect high prices to be linked to meat quality. When low-priced shrimp from Ecuador or India is available, I think even the live shrimp market will be significantly affected.”
The article was published in issue January/February 2024 AQUA Culture Asia Pacific
