Shell Shock – Mangrove Deforestation Threat to Farmed Shrimp Investments

Seafood, Financial Risk & Reward, Fixed Income

This Briefing Paper explains the challenges facing the global shrimp farming industry and warns that investors with a $63 billion exposure to the farmed shrimp sector are unable adequately to assess and compare farmed shrimp financial risks across the 27 leading publicly traded farmed shrimp equities.

Shrimp is the most valuable traded farmed seafood commodity globally. The global shrimp market was worth $45 billion in 2018 distributed across public, private, smallholder and commercial producers. The marine shrimp industry is forecast to continue growing at a Compound Annual Growth Rate (CAGR) of 3.7% to 5.2% between 2019 and 2025.

There is value-at-risk to investors due to known regulatory changes, market shifts and biological constraints that will continue to increase in the mid-term, e.g. by 2025, though the extent of the risk is as yet unknown.

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