White shrimps steal market lead from black tiger

SURABAYA: Among traders whose business is shrimp, the black tiger is a common name. This is a species of shrimp which is bigger in size and has black stripes. The stripes become bright red when the shrimps are boiled or fried. Most importantly, black tiger shrimp are the prima donna of East Java's marine export products.

That is up until recently.

"Markets now love white shrimps from Argentina," said Johan Surya Darma, marketing director of PT Sekar Bumi, one of the biggest marine product exporters in East Java. According to Johan, Argentinean white shrimp have advantages over Indonesian black tiger shrimp.

"First of all they are cheaper, and they might taste better because they are from the sea, while our black tiger shrimp are usually from tambak (shrimp farms)."

This year, East Java exporters found it difficulty to meet international demand.

"Stocks have declined this year. Perhaps it is because of an accumulation of the problems in 1998 and 1999," said Johan. Problems in 1998 included penjarahan (looting) of shrimp ponds in many regions, including East Java. In 1999, the biggest problem was the appreciation of the rupiah against the U.S. dollar. At that time, the international price of shrimp also decreased by up to 20 percent.

At the moment, exporters are lacking stock, while new competitors are entering the scene. Argentina is not the only one. There is Vietnam, and old competitors like India and Thailand. For East Java's exporters, India could be a threat too because it likes to lower prices, from US$15 per kilogram to about $12.80 or $13.50. It affects other countries' export prices.

As for Vietnam, Johan heard from traders abroad that it uses modern technology and modern management. On top of that, the government supports the infrastructure like roads and bridges from cities to farming locations.

Price controls

According to Johan, once the price goes up in Indonesia, it never goes down. He hopes that farmers will not follow the fluctuation of international prices, because they are not significant.

"And in the long term, it is not good for them."

He explained that if local prices were high, then export prices would be high too. If the price was considered too high, the markets would turn to other providers, other exporting countries.

Johan expressed hope that Indonesia would introduce fixed prices like in Taiwan, where shrimp prices are published in newspapers on a daily basis. In this way, nobody plays tricks on anybody else.

At this moment, price control in Indonesia is in the hands of the farmers. Ideally, price controls would be placed under an independent body, the members of which would include farmers, exporters and the government.

Sekar Bumi, which is located in Sidoarjo, south of Surabaya, exports more than 5,000 tons of marine products per year (compared to East Java's 55,206 tons per year), mostly in added- value form. They are cooked and pleasantly packaged.

"For packaging, the paper company says it needs imported material." Even though it needs special packaging and special processing, raw materials (the shrimp) account for more than 90 percent of production costs.

"We also pay a lot of money for electricity because we have to keep the shrimp in cold storage, the temperature of which must be precise, otherwise the products will spoil," explained Johan. The shrimp are exported to many countries. The three top market destinations are Japan, Europe and the U.S.

Another obstacle that he and other exporters in Sidoarjo, one of the richest industrial cities in the country, face is regional autonomy.

"We don't know whom to deal with. We used to deal with the East Java authority, now we have to deal with the Sidoarjo authority.

"It's not a matter of habit, but the expertise and experience is questionable."

As Johan said, regional autonomy might require a longer transition period. At least until the officials get enough education and training for related jobs.

"It's not only a matter of getting the regional budget (pendapatan asli daerah, PAD), but we all must see that export quality is maintained and the officials doing the quality tests and giving certificates must be qualified." (Sirikit Syah)