Energy cuts threaten Ecuadorian shrimp exports

The Ecuadorian Aquaculture Association (CNA) has warned on Oct. 7 that an escalation in energy cuts proposed by the government will affect shrimp production and reduce exports by $75 million per month.

A decision announced on Oct. 5 by government’s electricity agency, Cenace, requests a reduction of up to 100% in energy consumption from the industrial sector, between 8 am to 6 pm daily, for a period of at least 15 days, according to local media reports.

The country is facing its worst draught in 61 years and the energy grid is affected as around 72% of Ecuadorian electricity generation relies on hydropower, according to the ministry of energy and mining.

The intensified rationing could cause a reduction of $75 million per month in shrimp exports, CNA said, since the measure is having a negative effect in the entire value chain, affecting feed mills and shrimp processors.

“There is already a shortage of balanced food affecting current production, which ultimately will force producers to reduce seeding densities, thus leading to lower export volumes precisely in the season of highest demand, amid an already difficult year to the [shrimp] sector,” CNA executive president José Antonio Camposano said.

Ecuador is the biggest exporter of shrimp globally, with 1.2 million mt last year, according to figures from CNA. From January to August 2024, the country exported 817,955 mt of shrimp, with revenues of $4 billion. Revenues this year are down by 6.25% from the same period in 2023.

Ecuador’s Quito Trade Chamber requested the government to revise the measure and look for alternate solutions to the energy crisis, warning that the rationing will have “a devastating effect in production, employment levels and the economy,” it said on Oct. 5.

In September, CNA warned that unexpected electricity cuts could hurt shrimp exports, causing daily losses of more than $5 million.

Prices of shrimp from Ecuador have been increasing due to lower availability. Platts Ecuador Shrimp Marker was assessed at $5,600/mt FCA Guayaquil on Oct. 7, up from $5,000/mt on Sept. 6.

Platts is a part of S&P Global Commodity Insights.