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An Overview on the Soft Shell Crab Industry Q3 2019 | Business Insights

In our previous post on the molting of mud crab, we touched on the subject of soft shell crab production more on the molting subject here. While crabs are mineralizing their shell right after molting, some farm operators would harvest them and sell as soft-shelled crabs. These soft crabs are prized in many countries like Japan, Taiwan, and Korea. In this post, we will be discussing the current trends in soft shell crab production.



For the past few decades, countries like Myanmar, Thailand, Malaysia have enjoyed a lucrative business for soft shell crab farming. Most businesses rely on the wild-caught crabs at 60-100 grams as raw material for the soft shell crabs business. The crabs are sometimes declawed, and placed in individual boxes until they molt and harvest. The soft shell crabs are then frozen with the state-of-the-art freezing system, and exported to Japan, Taiwan, and the United States. However, many of them have faced eroding profitability due to the lack of smaller crabs as raw material. This is because, at 60-100 grams, most of the mud crabs are still in the juvenile stages. Typically mud crabs mature around the 200-300 gram range. Over-exploitation of these juveniles has a profound impact on the global crab population. As a result, most of the Malaysian soft shell crab producers have to cease operations due to the inability to scale the business profitably. Leaving countries like Myanmar and Bangladesh with plenty of crabs to lead the soft shell crab production.



The decline in 60-80 gram crab needed for soft shell crab production has pushed the prices up. The most notable case is in the Philippines where these 60-80 grams used for soft shell crab production can sell up to 40 pesos/each. The high prices of these crabs have driven fuel the expansion in the nursery and hatchery businesses that aims to produce sustainable seeds. The hatchery and nursery technology has been around for close to a decade, but have not been profitable due to the competition of wild fisheries. At the moment, the cost of producing soft shell crabs using crabs from sustainable aquaculture sources remains higher than using crabs from the wild. However, with almost a 20% increase in soft shell crab prices every year due to the decline in wild crabs, the industry will likely have to adopt the aquaculture practices.



Apart from the ever-increasing cost of raw material for the 60-80 gram crabs, soft shell crab farming is also very labor-intensive. Sometimes accounting up to 25-30% of the total operating expenses. This is due to the 24 hours monitoring that is done to ensure the crabs are harvested 4 hours after molting. As a result, this gives businesses located in areas with low labor cost a strategic advantage on soft shell crab production. Hence, making countries like Myanmar, Bangladesh, and Indonesia strategic location for production. Nevertheless, there are on-going talks on adopting automation technology, especially in the monitoring process to reduce the labor cost requirement.