The Hindu Business Line : Global shrimp prices continue to reign low

The global shrimp prices continue to reign low. The demand from Europe, the US and Japan has become sluggish. And, as the festive season of Christmas and New Year draws near, the seafood exporters have little to cheer about, but for the sharp appreciation of the dollar against the rupee.

Small players

“But even here, the exchange rate bonanza is limited to a few big players who have open positions and stand to gain from the appreciation of the dollar,” sources in the seafood trade said.

“The smaller players who are active in the short-term markets do not stand to gain much since the importers would have already discounted the appreciation in the dollar when negotiating the price, Mr Abraham Tharakan, Vice-Chairman of the Marine Products Export Development Authority (MPEDA), said.

Pre-determined prices

But the country does not stand to lose significantly despite the global slow down and sluggish prices. This is because the peak-season export contracts for Christmas-New Year had been tied up couple of months back on pre-determined prices, LCs (letter of credits) have been opened and most of those contracts are being executed, the sources said.

Premium Delicacies

If the shipping process continues unhampered for another fortnight, most of these Indian seafood consignments would be on the high seas.

While most seafood in general commands a premium in international markets, items such as shrimp, cuttlefish and squid are considered delicacies and command even higher prices in the global markets. And these would be the first to take a hit in the event of global recession. As the purchasing power among the people of developed countries begins to shrink, it is upper-end products which would be hit the hardest.

bounteous catch

With bounteous catch reported along the coastline, especially the West coast, the global slowdown has come at a most unfavourable time for Indian exporters. The demand is slowing down, the prices are falling and the margins are coming under pressure.

Exporters were confident that the export volumes may not be hit significantly this year. But the same cannot be said of foreign exchange earnings.

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