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Indian seafood exports are expected to reach around $7.5 billion in FY24 as per the current indication, down from $ 8.09 billion of the previous year.
Marine product exports touched $ 6.34 billion in the April 2023-January 2024 period as per Commerce Ministry figures. This is 7.5 percent short of the exports in the same period a year ago.
However, the seafood industry reckons that the volumes could be equal to or slightly lower than previous year. It was the sharp decline in the prices of frozen shrimp, mostly the vannamei variety, the chief product in the export basket, that undermined the export value. Shrimp prices slumped in the global market in the second half of the year, hurting the seafood industry as well as aquaculture farmers.
Halfway through the year, the industry gave up hopes of reaching the target of $ 9.25 billion set for the year. The current recovery in shrimp prices that is prompting higher stocking in the aquaculture farms for the summer crop will be reflected only in the exports for the next fiscal year.
“Right now, it is the lean season and not many purchases are happening. The shrimp prices are stable. The shrimp inventory in the US is diminishing and there are signs of orders picking up. The spring festival is over in China and we will get an idea of their trade by the end of this month,” said Pawan Kumar G, President of the Seafood Exporters Association of India.
He feels the outlook is better for the coming months though he considers Ecuador to continue to be a challenge to India. Ecuador is the largest farmed shrimp producing country with a production of about 1.2 million tonnes. “Overall, we expect no sudden increase or fall in shrimp prices in the coming year. While Ecuador is a strong competitor, we have an edge over them as the country exports mostly head-on raw shrimps. We have more value-added products which could sell better,” he said.
While India is optimistic about higher demand in the US, its major market, the prospects are uncertain in China and Europe, the other two big buyers. “In China, slowdown in the construction industry has led to default of salaries. This has affected the seafood industry with reduced offtake in their huge industrial canteens. In Europe too, spending has come down by both locals and the tourists, which has impacted the restaurant business,” said Kenny Thomas, MD of Jinny Marine Traders.
Some exporters said the recent notification of the government on payment to domestic micro, small and medium enterprises (MSME) within 45 days of purchases could pose problems, especially to those shipping to Europe. The payment cycle for the Europe-bound seafood exports is around 90 days and hence the exporters fear they could run short of funds to make the payment.
The setback in seafood exports hit aquaculture farms too, with farmers going for lower stocking of the farms in the second half of the year as prices dropped. But higher shrimp broodstock import and slight improvement in prices may encourage an increase in production in the next harvest due around May.
Shrimp prices have increased by 10-15 percent. “The 30 count vannamei shrimp is fetching Rs 450 per kg from a rate below Rs 400 about three months ago. The broodstock import has also gone up in the last few months. But the production will depend on the global prices. They will go for increased stocking if the prices rise,” said D Ramraj, former president of the All India Shrimp Hatcheries Association.
Indian shrimp production has dropped from a level of 9 lakh tonnes in 2022. Ramraj reckons it to be in the range of 8.2 to 8.5 lakh tonnes in 2023. There has been a steady increase in the black tiger shrimps which is a niche segment fetching premium prices. “The black tiger production should be 60,000 to 70,000 tonnes, up from 40,000-45,000 tonnes in 2022. They are grown to bigger sizes, though in terms of volumes they are lower compared to vannamei. Nearly 70 percent of farms in Gujarat and many in south Andhra Pradesh are now focusing on black tiger shrimp,” he pointed out.
According to global shrimp expert Willem van der Pijl, the shrimp broodstock supplies to India stabilised during November and December 2023 after a slump in October.
He said in his website, Shrimp Insights, that if broodstock supplies are an indicator for future production, Indian hatcheries are stocked to produce at least a similar amount of vannamei post larvae (PL) as in 2022. With farm gate prices showing some positive signs in January, it’s likely that PL demand will surge and that the market will absorb the hatcheries’ output during the first quarter of 2024. While he is not sure about the year-on-year increase in vannamei shrimp production during the first quarter of 2024, he feels that the total output may grow due to an increase in the production of black tiger shrimp, the broodstock supply of which has risen significantly.
The plunge in shrimp prices also affected the shrimp feed manufacturers.
“The lower prices led to a 5-10 percent reduction in feed consumption, which however, is lower compared to the 15 percent de-growth in the seafood industry. Our cost of production has gone up by 10 to 15 percent with a rise in raw material prices. We hope shrimp prices will improve.’’ said C R Rao, JMD, Avanti Feeds, a leading shrimp feed manufacturer.
Along with the feed makers, farmers too are hopeful of price recovery. “Farmers will weigh their options from time to time looking at the profitability – farm gate versus production costs. Though the farm gate prices are not lucrative, enterprising farmers in India are still hopeful of a price recovery and hence are stocking well for the upcoming summer crop,” said Ramakanth V Akula, CEO of The Waterbase Ltd., another major shrimp feed producer.
He too expects the shrimp prices to increase further to offset the rise in production cost. “For the shrimp feed manufacturers, the vannamei feed costs are at Rs 81 per kg on an average at net realisation levels, the prices should be at least 8 percent more to cover raw material inflation and the rising production and logistics costs,” he said.
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