Is the price volatility risk in shrimp farming manageable and can profitability be sustained?

Shrimp price volatility vis-a-vis increased production costs puts the shrimp farmers in debt, reduces further investments, and threatens the sustainability of shrimp farming. The cost and price analysis using the time series data drawn from primary and secondary sources substantiated that the production cost per kg of shrimp has increased gradually whereas the corresponding prices reveal a declining trend across the years. Further analyses indicated that shrimp price instability was higher for the largely supplied 21–30 g shrimp size vis-a-vis small- (15–20 g) and large-sized shrimps (> 30 g) over a period of time. Moreover, price trend scrutiny revealed that the price of small- and large-sized shrimps were higher in January, February, September and November months across the years. Likewise, higher price trends were observed in winter, spring, and monsoon seasons, whereas in summer, the price tended to decline. The ARIMA model fitted to predict the shrimp prices for the immediate future, forecasted an increasing price trend for 15 to 20 g size shrimps. Therefore, market based farming with phase-wise stocking of ponds with the adoption of on-farm nursery that would supply quality seed for a scattered stocking and produce different sized shrimps meeting the market demand is the prudent strategy to minimize the price risk. Similarly, partial harvesting of shrimps at 15 g size and its sale in the domestic markets could secure the investments made and continuing the crop for large size shrimps for the niche market would minimize the price risk and sustain the profitability. Further, insurance cover for shrimp price volatility and social capital development in the form of fish farmer producer organizations for collectively procuring inputs and sale of shrimps are suggested as strategies towards reducing the price risk and sustain the profitability of shrimp farming in India.