Bangladesh's shrimp industry has the capacity. Why isn't it growing?

Bangladesh wants to transform its "Blue Gold" into a $3 billion export industry by 2030, but achieving that ambition will require fixing the structural weaknesses that have held back the country's shrimp sector for decades.

Shrimp has long been one of Bangladesh's most valuable export commodities, contributing significantly to foreign exchange earnings while sustaining the livelihoods of millions in coastal communities. According to the Bangladesh Shrimp and Fish Foundation (BSFF), the industry supports more than 140,000 smallholder farmers and around 3.5 million people involved in farming, processing, transportation and exports. 

While shrimp has long been known as Bangladesh's "White Gold" because of its export value, the BSFF frames it as part of the country's broader "Blue Gold" economy, reflecting the strategic importance of aquatic resources in driving future economic growth. Bangladesh also has around 262,000 hectares of coastal land suitable for shrimp cultivation, a natural advantage that should place the country among the world's leading producers.

Despite these strengths, the sector has steadily lost ground. Export earnings have declined from nearly $529 million in 2016 to less than $300 million in 2025, despite growing global demand for shrimp. 

The contrast between Bangladesh's potential and its performance suggests that the industry's greatest challenge is not a shortage of land, labour or infrastructure, but the way the sector itself is organised.

More potential than performance

At the heart of the problem lies a fragmented value chain. The shrimp industry is built on three pillars, hatcheries, farms and processing plants, yet they continue to operate as separate entities instead of functioning as an integrated system. When one part of the chain underperforms, the effects are felt across the industry.

The weakest link remains shrimp farming. Nearly 90% of farms continue to rely on traditional extensive farming methods, resulting in yields of only 300 to 500 kilograms per hectare.

According to the BSFF, this is around 10 to 15 times lower than productivity levels in neighbouring countries such as India and Vietnam. Low yields not only reduce farmers' incomes but also leave processors without sufficient raw materials to operate efficiently.

Ironically, Bangladesh's processing sector faces the opposite problem. Existing processing plants have the capacity to process around 400,000 metric tonnes of shrimp annually, yet they currently operate at less than 10% of that capacity. Underutilised factories carry high fixed costs, making Bangladeshi shrimp less price competitive in global markets despite the country's considerable processing infrastructure.

Farm fragmentation further deepens the crisis. The average shrimp farm spans just one to two acres, making it difficult for farmers to invest in technologies such as aeration systems and biosecurity measures. Small landholdings also limit access to institutional finance, forcing many producers to depend on informal lenders and middlemen.

This dependence creates one of the industry's biggest contradictions. 

Middlemen remain essential because they provide quick credit and guaranteed buyers in areas where formal financial services remain limited. Yet the same loans often carry interest rates of 25-40%, trapping farmers in a cycle of debt that leaves little room for investment or expansion. In many ways, middlemen have become both a financial lifeline and a structural barrier, keeping production afloat while preventing long-term modernisation.

The BSFF argues that reversing this trend will require structural reforms rather than isolated interventions. It recommends introducing an Aquaculture Credit Guarantee Scheme to improve farmers' access to institutional finance while reducing dependence on informal lending. 

The roadmap also proposes cluster-based farming, allowing neighbouring farmers to share infrastructure, water management systems and biosecurity practices without giving up ownership of their land. Such collaboration could help overcome the limitations created by fragmented landholdings while improving productivity across farming communities.

The cost of standing still

Bangladesh's challenges are not confined to domestic production. The global shrimp market has changed significantly over the past decade and Bangladesh has struggled to keep pace.

Vannamei shrimp now accounts for around 77% of global production, yet Bangladesh only approved its commercial cultivation in March 2023. Arriving late to this transition has weakened the country's competitiveness in high-volume export markets. 

However, replacing indigenous Black Tiger, or Bagda, shrimp entirely may not be the answer.

Instead, the BSFF proposes a dual-track strategy. Vannamei could be used to increase production volumes and make better use of idle processing capacity, while Black Tiger shrimp could be repositioned as a premium product for high-value markets in Europe and Japan. Rather than competing solely on price, Bangladesh has an opportunity to compete through quality, branding and product differentiation.

Another challenge is approaching quickly. Exporters seeking access to the United States market will need to comply with the digital traceability requirements of the US Food Safety Modernization Act from 20 July 2028. Bangladesh's shrimp supply chain currently remains fragmented, with products passing through multiple collectors and intermediaries before reaching processors, often without comprehensive digital records.

Meeting these requirements is likely to become essential for maintaining market access. The BSFF recommends introducing digital ledger systems or QR code-based tracking throughout the supply chain, enabling exporters to verify product origin, food safety and antibiotic-free production. Rather than viewing the 2028 deadline solely as another regulatory hurdle, improved traceability could become a branding opportunity that differentiates Bangladeshi shrimp in increasingly competitive international markets.

Value addition represents another area where Bangladesh continues to lag behind. Much of the country's shrimp is still exported in frozen whole form, even though ready-to-cook and branded retail products can command two to three times higher prices. Expanding Specific Pathogen-Free hatcheries while investing in processed and branded seafood products could therefore increase both productivity and export earnings.

A roadmap or a turning point?

The BSFF's roadmap ultimately argues that Bangladesh's shrimp industry suffers less from a shortage of resources than from fragmented governance. More than 30 different laws and multiple agencies currently oversee different parts of the sector, often without sufficient coordination. The challenge is therefore not simply to build more hatcheries, establish more farms or expand processing plants. It is to create an institutional framework capable of connecting them.

If these reforms are implemented successfully, the roadmap projects that average yields could rise to more than 1,500 kilograms per hectare, processing plant utilisation could exceed 85% and farmer incomes could double or even triple, creating more stable employment across coastal regions.

Bangladesh has never lacked the natural resources, processing capacity or entrepreneurial farmers needed to build a globally competitive shrimp industry. What it has lacked is a system that allows each part of the value chain to work towards the same goal. 

Reaching the $3 billion export target by 2030 will therefore depend not only on producing more shrimp, but on transforming a fragmented industry into one that is modern, coordinated and competitive enough to realise the promise of the country's Blue Gold.

Tahsin Samin is a Sub-Editor at TBS

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.