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Ecuador invites Chinese to inspect shrimp sites, plants

Shrimp export ban to China comes amid fears that weakness of Chinese currency will damage Ecuador's exports.

The Ecuadorian shrimp industry has invited Chinese officials to the South American country to inspect production and processing sites in a bid to assuage concerns about the threat of white spot disease.

A delegation of Ecuadorian shrimp industry officials is in China in an attempt to reverse the ban on five Ecuadorian producers.

A ban on shrimp from PCC Congelados y Frescos, Santa Priscila, Expalsa, and Winrep remains in place but the ban on Omarsa products was lifted after Chinese authorities updated the list of approved fishery products establishments that could export to China.

Ecuadorian officials appear determined not to return home until they have secured a positive result for an industry considered vital to the country´s economy

“My trip has no return date, we are going to dedicate the time necessary to resolve this impass,” said Ecuador's Production, Foreign Trade, Investment and Fisheries Minister Iván Ontaneda, according to the El Mercurio website.

The Ecuadorian delegation's presence was confirmed to IntraFish by a company official from Guayaquil-based PCC Congelados y Frescos, which was named along with Expalsa from the same city in a second group of Ecuadorian companies.

"It's a temporary measure. An ecuadorian team has already traveled to China," the PCC Congelados y Frescos official said.

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Santa Priscila, Omarsa, and Winrep were banned earlier last week over fears of white spot contamination.

Ecuador has become increasingly reliant on the Chinese market in recent years, replacing Vietnam as the leading supplier to the Asian superpower. Around 60 percent of Ecuador's shrimp goes to China.

Vietnam was previously a back door into the Chinese market for foreign producers, but over the last year or so sales to China’s neighbor have fallen sharply.

While shipments to China from Ecuador in the first seven months of the year were up 232 percent at 386 million pounds, volumes to Vietnam were down 52 percent to 130 million pounds.

Likewise, revenues from exports to China were $990.6 million (€892.5 million), three times the total to Vietnam and a complete turnaround from the same period of 2018.

Ecuadorian production has increased in the past few years leaving the industry better placed to respond to demand.

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But US President Donald Trump's increasingly fraught trade war with China has also exposed a weakness in Ecuador's exposure to the Chinese market, which takes 60 days to reach by ship from South America.

This is because shrimp is sold in US dollars and the Chinese yuan currency has slumped to an ll year low against the US currency making it much more expensive to import shrimp.

“When the exchange rate varies in this way, in a substantial way, a Chinese buyer may encounter substantial losses at the time the shrimp arrives and has to convert that product into local currency,” José Camposano, president of Ecuador’s Camara Nacional de Acuacultura trade body (CNA), said according to the expreso.ec website.

A container of shrimp that previously cost $150,000 (€135,491) would now cost up to 15 percent more potentially raising it to $172,500 (€155,796) per container, the report suggested.

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