Prown markets in Indonesia-Cekindo

Prawns as A Strategic Commodity of Indonesia in 2014

  • InCorp Editorial Team
  • 29 April 2014
  • 3 minute reading time

Prawn Business Opportunities as Potential Commodities in Indonesia

Prawns are a major commodity in the aquaculture industry because they are in high demand and have high economic value. Recently, demand for prawns from Indonesia has increased significantly.

In the first 6 months of 2013, exports were valued at US$1.97 billion, of which prawns accounted for 36.7 % or US$723.6 million. This is a positive improvement because Indonesia has no problems with Early Mortality Syndrome (EMS), which plagued prawn farmers in other producing countries such as Thailand, Malaysia and Vietnam. It also encourages market entry to Indonesia for prawn products.

Indonesia has great potential compared to other competitor countries, particularly in Southeast Asia. The total aquaculture area of 1.2 million ha, has an effective potential for prawn culture ± 773 thousand hectares. To that end, the Ministry of Maritime Affairs and Fisheries (MMAF) is optimizing the potential of prawn farming to be sustainable, which encourages increased production both in quality and quantity.

Among the projects, a pilot program of farm ponds that was conducted in 2012 in six districts on the northern coast of West Java and Banten continued in 2013 in 28 districts, including Central Java Province , East Java , South Sulawesi , NTB , North Sumatra and Lampung. The farming program is an attempt to revive the nation’s passion for prawn farming.

The advantages of Indonesian prawns

Future prawn farming has a greater chance of being competitive in the global market, because Indonesia does not face any accusations of subsidies or dumping. Based on the investigation results of the Countervailing Duty (CVD), the cause for U.S. Department of Commerce actions against imports of frozen shrimp from Indonesia was not proven. Moreover, the implementation of the annual National Residue Control Plan by the Ministry of Maritime Affairs and Fisheries Indonesia has made prawns a residue-free product, and sanction CD 220 was lifted by the EU Commission. The increasing demand for prawns is also accompanied by a price increase. This is a golden opportunity that should be exploited by the prawn cultivator community, mainly to increase production by maximizing the use of  aquaculture. Lawn product excellence requires foreign direct investment to increase the prawn production capacity.

The constraints on the development of Indonesian prawns and settlement solutions

  • Related to the development of prawn industry, the MMAF has revitalized ponds by improving the infrastructure in primary, secondary and tertiary channels, as well as guaranteeing the water supply, which is expected to optimize the prawn farming area and increase productivity.
  • MMAF has maintained and enhanced cross-sector cooperation. Contributions were also made by the National Land Agency associated with the Certification of Land cultivators, PT, the PLN (National Electricity Company) in support of electricity supply, the Ministry of Public Works related to infrastructure support, the Ministry of Energy and Mineral Resources related to fuel energy support, banks related to financial support plans, the partners, investors, as well as the local governments.

The increase in prawn production provides additional foreign income from the export of prawns. Economic growth at the start of market expansion in Indonesia for prawn products is accompanied by increased employment in the fisheries sector. Each hectare of prawn farm can absorbs more than three workers. The aquaculture subsector can be seen as a major barometer for national fisheries development.

Pandu Biasramadhan

Senior Consulting Manager at InCorp Indonesia

An expert for more than 10 years, Pandu Biasramadhan, has an extensive background in providing top-quality and comprehensive business solutions for enterprises in Indonesia and managing regional partnership channels across Southeast Asia.

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