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August 11, 2015

Panama/Ecuador

Farallon Aquaculture Closes Its Hatchery in Ecuador

 

On July 31, 2015, Jose Bolivar Martinez, “Boli”, owner of Panama-based Farallon Aquaculture, which has shrimp hatcheries and farms in Central and South America, said he shut down his shrimp hatchery in Ecuador, "Faraecu", because Ecuador switched to lower stocking densities.

 

“In May we got a 50% reduction on a postlarval shrimp order from Omarsa.  We observed that other farms were also reducing orders.  When I found out that the plan of most farms was to reduce densities, I knew it was time to go.  ...With the low densities there is no possibility to...breakeven as an...independent hatchery,” Martinez said.  Farallon does not own a shrimp farm in Ecuador.

 

High mortalities in Ecuador forced farmers to lower stocking densities.  Talk in the shrimp sector is circulating that early mortality syndrome (EMS) is behind the mortalities, something the Ecuadorian Government and some industry figures refute.

 

Recently, the  Faraecu hatchery was only marginally profitable because postlarvae prices were low and competition was intense.  Overcapacity in the hatchery industry, combined with lower demand, fueled rumors that PL prices would drop even further.

 

In the late 1990s, in Panama, Farallon developed resistance postlarvae, sold under the name "Megalarva".  “Our technical group had worked since 1999 to develop a system that would continuously improve survival without detriment of improvement to other characteristics such as growth rate and fecundity,” Martinez said.  Farm production in Ecuador at the time was between 200 to 400 pounds per hectare.  “Most companies were on the verge of bankruptcy.  People were very pessimistic about the future,” Martinez said.

 

Faraecu was founded in late 2002, after reaching an agreement to produce postlarvae for Omarsa at its facility in Mar Bravo.  In June 2003, Farallon Aquaculture inked a similar agreement with Grupo El Rosario, at its hatchery in Barandua.

 

“I was even offered by founder Mr. Arturo Vannoni to be a partner at Omarsa if I helped them reach 1,000 pounds per hectare....  I guess I should have taken the offer seeing how well they are doing now...but for me, having helped them save their company means more than any shares or money,” said Martinez.

 

According to Martinez, production results at El Rosario also improved with the use of “Megalarva”.  ...Santiago Maspons and Benigno Viteri from El Rosario did not believe me when I told them I could take them to produce 2,000 pounds per hectare at the time.  They both told me later, they thought I was a ‘good salesman’.  Yet, we worked together hand in hand until they reached and surpassed this seemingly unreachable goal,” Martinez said.

 

In 2007/2008, El Rosario (3,500 hectares of ponds) merged with the Pescanova-owned Promarisco’s farms, and Faraecu began selling postlarvae to third parties.  “By then, our genetics had been copied all over Ecuador, and some of the copies were really good,” Martinez said.

 

On top of increased hatchery competition, the government imposed new import restrictions in 2005 and, thereafter, only specific pathogen free (SPF) larvae could be exported to Ecuador.  And in 2008, stricter regulations came into play, so Faraecu could no longer import the real “Megalarva”, Martinez said.  “With a segmented genetic program isolated from the original families of our genetic plan, we were not able to do our...best,” he said.

 

As Ecuadorian shrimp production improved, Faraecu maintained its larvae quality “to be equal or slightly better than the hybrids in the market”, however they had lost their big advantage.

 

“We had to compete with low prices like everyone else.  Since Ecuador has over 700 hatcheries, the market price of the postlarvae fell to a marginal point, making the business not very attractive for someone who doesn’t have a growout phase in Ecuador,” Martinez said.

 

Source: Undercurrent News [eight free news reads every month].  Editor, Tom Seaman (undercurrent@undercurrentnews.com).  Omarsa Larval Shrimp Supplier Closes Ecuador Ops Due to Low Farming Densities.  Alicia Villegas (alicia.villegas@undercurrentnews.com).  August 10, 2015.

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