_-_copia.jpg?w=800&resize=800,500&ssl=1 "Honduran shrimp industry")
The Honduran shrimp industry is undergoing a significant crisis following the breakdown of diplomatic relations with Taiwan in March 2023 and the failure to reach trade agreements with China. The decision by the government of Xiomara Castro to end ties with Taiwan, a historic partner since 1941, has had a profound impact on the national aquaculture sector. This situation has led to considerable economic losses and the closure of key markets for shrimp exports.
Consequences for trade and economy after ending ties with Taiwan
The shrimp industry in Honduras has faced significant financial setbacks after diplomatic ties with Taiwan were severed, as Taiwan was the primary market for its exports. Prior to this breakup, Taiwan constituted up to 80% of exports for Honduran shrimp, and ending the Free Trade Agreement with Taiwan led to a 20% tariff, which had a detrimental impact on the foreign currency earnings of this sector. As per the Honduran National Association of Aquaculture Producers (Andah), in 2024, losses amounted to approximately $47.7 million, alongside a decrease of 6.2 million kilos in shrimp exports, due to the Taiwanese market’s closure.
Honduras’ effort to set up a trade deal with China has failed to compensate for these downturns. Despite an initial agreement to send 250 containers of shrimp, merely two consignments were completed. Furthermore, the prices proposed by Chinese buyers, approximately $4 per kilogram, fall short of the production expenses, which vary from $6.30 to $6.50 per kilogram. This scenario has caused a financial disruption impacting the industry’s profitability and constraining its recovery prospects.
Impacts on society and plans for diversification
The collapse in the shrimp sector has significantly impacted society, resulting in the shutdown of multiple processing facilities and unemployment for thousands in areas like Choluteca and Valle. In response, the Honduran government has initiated steps to broaden export markets by considering renewed trade ties with Taiwan and exploring new opportunities in nations like South Korea. Taiwan’s Foreign Minister, Lin Chia-lung, has shown his nation’s openness to revive diplomatic relations with Honduras after the presidential elections in November, recognizing the shrimp sector’s decline since the 2023 rupture.
The present scenario shows the impact of trade and diplomatic choices that have influenced the financial steadiness of the aquaculture industry. Relying on just one market, along with the absence of successful agreements with new collaborators, has exposed the industry to risks. This underscores the necessity for stronger and more varied plans to guarantee its longevity and support the nation’s economic growth.
.jpg?w=360&resize=360,240&ssl=1 "Manuel Zelaya")
.jpg?w=360&resize=360,240&ssl=1 "Rixi Moncada")
_-_copia.jpg?w=360&resize=360,240&ssl=1 "Xiomara Castro")