Comparing Asian shrimp farming: the domestic resource cost approach

The technological advances of Asian shrimp farming systems have not only co ntributed to a rapid expansion of Asian shrimp culture, but have also creat ed greater opportunities for foreign exchange earnings in the 1980s and 199 0s. Current trends, however, indicate significantly increased competition i n world shrimp markets with many Asian countries initiating or expanding sh rimp culture. Oversupply of cultured shrimp products in the global market h as already occurred in the early 1990s. Consequently, market prices of shri mp have dropped and profit margins have been squeezed by export markets. Th e purpose of this study is to estimate the degree of comparative advantage of Asian cultured shrimp countries in producing and exporting shrimp to Jap an, the US and the EU (European Union) in 1994. First, cost comparisons of Asian shrimp farming technologies using intensive, semi-intensive and exten sive systems among Thailand, Indonesia, Philippines, Malaysia, Viet Nam, In dia, Bangladesh, Sri Lanka, China and Taiwan are discussed. Next is an anal ysis of comparative advantage using the domestic resource cost (DRC) method , taking into account opportunity costs of not only input factors, but also the foreign exchange rate and the price of shrimp in the foreign market. R esults show that nearly all Asian shrimp producers have greater comparative advantage in exporting shrimp to Japan than to the US and the EU markets, largely because of the premium shrimp prices received in the Japanese marke t. Moreover, Thailand, Indonesia and Sri Lanka have stronger comparative ad vantage relative to the other Asian countries studied. On the other hand, w ith high input costs, Bangladesh has a comparative disadvantage in exportin g shrimp to the EU and US markets. (C) 1999 Elsevier Science B.V. All right s reserved.