The fisheries sector plays a pivotal role in Indonesia's economy, contributing significantly to foreign exchange earnings, particularly through shrimp exports. 

Data from the Ministry of Maritime Affairs and Fisheries (KKP) indicates that shrimp accounted for over 28% of total seafood exports in 2024. With extensive aquaculture ponds exceeding 300,000 hectares and a favorable tropical climate, Indonesia possesses substantial potential to be a leading global player in this industry. 

However, in recent times, Indonesian shrimp farmers have encountered significant challenges stemming from international trade dynamics. Shifts and tensions in international trade relations have prompted adjustments in export tariff policies in several key destination countries. These tariff changes have introduced uncertainty that directly affects the viability of local aquaculture businesses. 

The Impact of International Trade Policies on Shrimp Exports 

The less stable international trade environment recently has led several major importing nations to implement or increase import tariffs on specific products, including shrimp. The application of these export tariffs (or more precisely, import tariffs in the destination countries) effectively increases the selling price of Indonesian shrimp in those markets. 

This price increase diminishes the competitiveness of Indonesian shrimp compared to products from other countries that may not be subject to similar policies or possess a lower cost structure. 

Consequently, the attractiveness of Indonesian shrimp to international buyers has decreased. They face a choice between absorbing these increased costs, which could reduce their profit margins, or raising prices for end consumers, or seeking alternative supply sources from other nations. 

In many instances, the latter option is preferred, particularly if the price difference becomes substantial. This phenomenon has resulted in unilateral cancellations of shrimp export orders by international buyers, leaving Indonesian farmers with harvested stock that was initially allocated for overseas markets. 

The Domino Effect: From Export Cancellations to Local Market Pressure 

The cancellation of export contracts creates a complex domino effect. Firstly, farmers lose a primary source of planned income. Secondly, they now hold significant volumes of harvest-ready shrimp without a clear market destination. The most logical remaining option is to sell this produce in the domestic market. 

However, the local market has significantly different characteristics compared to exports. The domestic market's absorption capacity for shrimp, especially export-quality shrimp, is relatively much smaller. Furthermore, price sensitivity in the local market tends to be higher. A sudden surge of ex-export shrimp into the local market will rapidly depress selling prices.  

If many farmers release their harvest into the local market simultaneously, the potential for a sharp decline in shrimp prices becomes very real, threatening profit margins and even the sustainability of aquaculture businesses.  

The Harvest Scheduling Dilemma: Mitigating Local Market Oversupply 

Recognizing the risk of price declines in the local market, farmers face an additional challenge: coordinating harvest schedules. To prevent oversupply at any given time, the ideal scenario is to arrange staggered harvests.  

If a major shrimp farming region has a simultaneous peak harvest and all the produce is directed to the local market, basic supply and demand principles will automatically push prices down to potentially unprofitable levels. 

Coordinating these harvest schedules is not a simple task. It requires effective communication and collaboration among farmers within a region, which is often difficult to achieve due to the independent nature of their operations. Moreover, this situation frequently compels farmers to either harvest prematurely or postpone harvesting beyond their optimal schedule.  

Farmers who might be ready to harvest based on the ideal aquaculture cycle may have to accelerate or delay their harvest to avoid schedule conflicts with other farmers. These sudden schedule changes naturally disrupt production planning, feed management, labor allocation, and subsequent pond maintenance cycles, adding to operational complexities and costs. 

Adaptive Strategies for Business Resilience 

To address these challenges, Indonesian shrimp farmers need to adopt more adaptive and innovative strategies: 

  • Flexible and Coordinated Harvest Management: Enhanced communication and coordination among farmers, potentially facilitated by associations or cooperatives, is essential.  

Establishing a shared information platform on harvest plans could help regulate the flow of supply into the local market more evenly.  

Flexibility in determining harvest timing and volumes based on market signals is also crucial. 

  • Diversifying Distribution Channels: The reliance on shrimp exports needs to be reduced. Farmers need to actively explore and develop alternative distribution channels in the domestic market. This could include: 
  • Targeting the local premium market segment (high-end supermarkets, fine dining restaurants, hotels). 
  • Establishing partnerships with domestic shrimp processing industries (for frozen products, nuggets, etc.). 
  • Developing direct-to-consumer sales models through online platforms or specialty markets. 
  • Exploring alternative export markets in countries without burdensome export tariff policies, such as Europe and Japan. 
  • Leveraging Technology and Market Data Analytics: Technology can play a significant role. Digital applications or platforms could provide real-time information on local market prices, demand across various segments, and even help connect farmers directly with potential buyers or logistics providers.  

Analyzing market trend data can assist in making more informed decisions about optimal harvest times. 

  • Strengthening the Role of Supporting Institutions: Cooperatives, farmer associations, and the government all have a vital role. Cooperatives can assist with collective marketing or providing post-harvest facilities (like cold storage).  

Associations can serve as platforms for coordination, policy advocacy, and information dissemination.  

The government is expected to provide support through access to global market information, facilitating promotion in non-traditional markets, and pursuing more favorable trade negotiations. 

Indonesia's shrimp export industry is at a critical juncture due to global trade dynamics and the implementation of export tariff policies in several key destination countries. The challenges of order cancellations, pressure on the local market, and the complexities of harvest scheduling require an intelligent and adaptive response from shrimp farmers.  

The key to success lies in the ability to collaborate on harvest management, pursue market diversification, utilize information technology, and secure support from relevant institutions.  

With the appropriate strategies, the Indonesian shrimp industry can not only withstand global uncertainties but also identify new opportunities for sustainable growth and development. Find your solutions with Bahtera here.