Author : Rahim Darma

Summary : The study assessed the performance and prospects of the Indonesian shrimp industry. Specifically, this study described the growth rates in shrimp production, exports, and market share of Indonesian and other shrimp producing countries, and analyzed external and internal factors influencing Indonesian shrimp export demand and supply. The equilibrium and disequilibrium models of demand for and supply of Idonesian shrimp exports were estimated simultaneously using time-series (1971-1991) data. Shrimp, an important fishery commodity in Indonesia, is mainly exported. It is the largest export earner in the country, accounting for about 75 percent of the total fishery export earnings. Indonesia's shrimp production and exports accounted for 10.3 and 9.5 percent of the world shrimp production and exports, respectively, making Indonesia the second top producer and exporter of shrimps in the world 1990. Results of the study revealed that the price (ratio) elasticities of demand were greater than unity indicating that export demand was highly responsive to the export-world price ratio. On the other hand, the estimated price elacticities of supply were positive, significant, and enelastic in the equilibrium model, but elastic in the disequilibrium model. This shows that shrimp export supply would expand with the increase in the export-domestic price ratio. The estimated per capita income elasticities of developed countries were greater than one and positive indicating that Indonesian shrimp export demand was highly responsive to changes in the income of importing countries. The coefficient of world price of fish was insignificant indicating that fish does not substitute for shrimps in the world market. The time variable which was used to capture the effect of population and consumer preferences had positive and significant coefficients. This finding suggests that Indonesian shrimp export demand increased owing to population growth and the growing preference of consumers in developed countries for shrimps.