By Hasanuddin Atjo, National Shrimp Industry Practitioner
MARITIMEPOSTS.COM — Indonesia’s shrimp farmers have experienced a steady decline in competitiveness over the past several years. This trend could pose a serious threat to the national economy as well as the livelihoods of communities that depend on aquaculture, particularly in coastal areas.
The decline in competitiveness has been driven by several factors. One of the most significant concerns is food safety, including findings related to radioactive Cs-137 and antibiotic residues by the United States Food and Drug Administration (FDA).
These developments have resulted in increasingly stringent requirements for Indonesian shrimp products to enter the United States market.
The competitiveness challenge has become more complex due to high logistics costs, rising feed prices, and the limited availability and high cost of fuel. Unstable electricity supplies from the state utility PLN in several shrimp-farming centers have further increased production costs and ultimately squeezed farmers’ operating margins.
Competitive pressure intensified following the entry of 120 tons of imported shrimp from Ecuador in June 2026 through a bonded-zone facility in East Java. The shrimp was reportedly intended to supply raw materials for several processing industries in the region.
There have also been reports suggesting that the imported shrimp originated from Ecuador and had previously been rejected by China after the detection of metabisulfite, a compound commonly used as a preservative. If confirmed, the issue would extend beyond commercial competition and raise serious concerns about food safety.
Lower production costs are one of the main factors making imported shrimp more competitive. Production costs for shrimp in Ecuador and India are estimated to be around US$1–1.5 per kilogram lower than those in Indonesia. This cost gap represents a major challenge that must be addressed if Indonesia is to maintain the competitiveness of its shrimp industry.
The impact is already being felt in the absorption of locally produced shrimp.
Several processing industries in East Java have temporarily reduced or halted purchases of locally farmed shrimp, citing full factory capacity. Such a situation could weaken farmers’ bargaining positions and potentially undermine the sustainability of shrimp-farming operations.
The threat to Indonesia’s shrimp market extends beyond the United States. Japan, traditionally one of Indonesia’s major shrimp markets, is increasingly looking at alternative sources, including India, where prices are more competitive.
Japan has historically absorbed nearly 20 percent of Indonesia’s total shrimp exports. In 2025, Indonesian shrimp exports to Japan were estimated at approximately 40,000 tons. Recent developments, however, indicate that Japanese processing companies are paying greater attention to shrimp sourced from India.
Several Japanese processing companies have even established representative offices in India. One of their roles is to provide guidance and support for quality management in farmed shrimp production.
This development illustrates how increasingly open and competitive the global shrimp market has become, as producing countries continue to strengthen efficiency, product quality, and supply-chain performance.
The competitiveness challenges facing Indonesian shrimp farmers cannot be allowed to continue unchecked, nor should the burden be placed entirely on farmers. Concrete and measurable interventions are needed from multiple stakeholders, including the government, businesses, processing industries, financial institutions, research organizations, and universities.
5 Strategic Solutions
A comprehensive set of strategies and solutions must be implemented urgently to restore the competitiveness of Indonesian shrimp farmers, whose businesses are currently under increasing pressure.
First, the government needs to provide subsidy schemes and targeted electricity incentives for smallholder shrimp farms.
Such support is essential because electricity is one of the major components of production costs, particularly in technology-intensive aquaculture systems.
The government should also facilitate access to high-quality feed ingredients, including creating opportunities to import raw materials required for independent feed production.
This is necessary to help reduce the rising cost of commercial shrimp feed. The various factors contributing to high feed prices need to be comprehensively mapped and addressed through coordinated solutions.
This is particularly important because feed and electricity account for approximately 70–75 percent of shrimp production costs. Therefore, successfully reducing feed and electricity expenses could become a major lever for restoring the competitiveness of Indonesia’s shrimp-farming sector.
Farmers also need access to affordable financing with low interest rates and grace periods that are aligned with shrimp production and harvesting cycles.
A dedicated fisheries financing scheme is needed so that farmers can invest in technology, production facilities, and business capacity.
Second, Indonesia needs to accelerate the transformation of shrimp-farming technology, moving from traditional systems toward traditional-plus, semi-intensive, and sustainable intensive production.
This transformation must be accompanied by technical assistance to improve productivity through water-quality management, appropriate stocking densities, the use of healthy post-larvae, nursery systems, and strict implementation of biosecurity standard operating procedures (SOPs).
Gradually, farmers should also be encouraged to adopt Internet of Things (IoT)-based technologies to monitor key water-quality parameters, including dissolved oxygen, pH, and temperature, in real time.
Such monitoring can help farmers respond more quickly to changing conditions and reduce the risk of crop failure caused by environmental disturbances and disease outbreaks.
Third, health-testing facilities for shrimp post-larvae and water quality need to be expanded in major production centers.
These facilities would enable farmers to detect potential disease outbreaks at an early stage, including Early Mortality Syndrome (EMS) and White Spot Syndrome Virus (WSSV), both of which remain serious threats to shrimp-farming productivity.
The availability of high-quality post-larvae must also be guaranteed. Shrimp seed certified as Specific Pathogen Free (SPF), while also demonstrating resilience to environmental changes, needs to be available in sufficient quantities through standardized government hatcheries and qualified private hatcheries.
Fourth, Indonesia needs to build a stronger partnership ecosystem connecting on-farm and off-farm sectors.
Such partnerships should bring together farmers at the production level, upstream industries providing supporting infrastructure and production inputs, and downstream industries involved in processing and marketing.
This ecosystem is essential for strengthening the supply chain while creating a more efficient, transparent, and mutually beneficial shrimp trading system.
Farmers should also be supported in obtaining sustainability certifications such as the Aquaculture Stewardship Council (ASC) or Best Aquaculture Practices (BAP) through collective certification schemes.
Such certification is becoming increasingly important as export markets such as the United States, European Union, and Japan impose stricter requirements related to environmental performance, food safety, traceability, and social responsibility.
Fifth, Indonesia must maintain supply volumes to traditional markets such as the United States and Japan while simultaneously diversifying its export destinations.
Non-traditional markets in the Middle East, South Asia, and Africa could provide new opportunities, alongside efforts to strengthen Indonesia’s substantial domestic market.
At the same time, the domestic processing industry should be encouraged to move beyond dependence on exports of frozen raw shrimp.
Downstream processing must be strengthened through the development of higher-value, ready-to-eat products that generate greater economic returns.
Addressing Indonesia’s shrimp competitiveness challenge requires consistent and sustained cross-sector collaboration. The government cannot solve the problem alone, just as farmers cannot be expected to overcome these structural challenges on their own.
If the situation is not addressed comprehensively and promptly, Indonesia’s shrimp industry risks losing both its competitiveness and its strategic position as one of the country’s leading export commodities in the global market.
Conversely, if production costs, technology, quality, financing, supply chains, and market access can be improved collectively, Indonesia’s shrimp industry still has significant potential to regain competitiveness and become a sustainable driver of economic growth in coastal communities.
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Editor: Denun
