By Francisco Hernández | 2024-08-28

TEGUCIGALPA -- The Honduran shrimp industry is experiencing its worst crisis ever following the country's break in diplomatic relations with Taiwan.

Exports have dropped in 2024 by approximately $43 million, largely because of reduced purchases by Honduras' key market, Taiwan.

After Honduras severed ties with Taiwan in March 2023, the country began selling shrimp to China, which pays significantly lower prices than Taiwan did, Javier Amador, executive director of the National Association of Aquaculturists of Honduras (Andah), told the EFE news agency in August.

Severe consequences

"We lost a key market -- our top export destination, which generated substantial foreign currency. The impact has been severe, especially since we now face a 20% tariff to export shrimp to Taiwan," he explained.

After Honduras switched diplomatic recognition to Beijing, it gave notice that it would abrogate its free trade agreement with Taiwan.

In March 2023, Taipei withdrew its ambassador from Tegucigalpa after learning that Honduran Foreign Minister Eduardo Enrique Reina had visited China to normalize relations between the two countries.

After Honduras severed ties with Taiwan, its shrimp exports were hit hard by a 20% Taiwanese tariff, Amador told EFE.

Additionally, low purchase prices in China have heightened uncertainty among exporters.

Amador criticized the decision to switch diplomatic partners as "simply hasty," stating that ties with Beijing have brought "more harm than good" to Honduras' shrimp sector.

Setback with Mexico

Compounding Honduras' woes, Mexico blocked imports of its shrimp for almost four months this year.

On January 23, Mexico temporarily barred all shrimp from Guatemala, Honduras, El Salvador, Nicaragua and Costa Rica. Its customs agency cited concerns over crustacean smuggling from Ecuador.

A Mexican court allowed the resumption of farmed shrimp imports from Central America in early May.

But by then, several Honduran shrimp plants had shut down and 6,000 workers had lost their jobs permanently, EFE reported.

"Honduran exports once provided stability, consistent job creation and social peace in the region, but all of that was lost almost overnight," Amador told EFE.

According to EFE, the shrimp industry provides about 20,000 direct jobs and generates $300 million annually.

However, projections indicate that this year it will lose at least $100 million in revenue.

"There are many companies in the sector that have closed, and others face uncertainty about whether to continue production or risk further losses," he said.

Since 1941, Honduras and Taiwan had enjoyed a partnership involving military, educational and economic cooperation. Taiwan funded technical and agricultural aid projects and hosted numerous Honduran scholarship students at its universities.

Tegucigalpa's shift to Beijing sundered that relationship.