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Exporters switching over to value-added products -- US team on visit to seafood units

R. Balaji

CHENNAI, May 21

THE seafood industry is going through a change with the exporters increasingly focussing on value-added exports rather than on bulk commodities. This is inevitable as the Indian players have neither the financial strength nor inventory holding power to s ustain in the commodity business. But this change will mean that quality will have to be a primary concern and the industry will have to toe the line laid down by the importers, according to industry representatives.

The shift was being driven from both ends with the buyers - the US and the European Union - looking increasingly to India as a major supplier and the Indian industry realising the advantages of value-addition. Bulk exports to Japan, and to other reproces sing centres such as Vietnam and Thailand only meant that the reprocessors were making larger margins, said sources.

According to the industry representatives, the on-going visit of the US-FDA team to the seafood processing plants is indicative of this shift. In the last one year about 10 units have obtained approval and more are in the process of doing so.

Seafood processing centres are gearing up for value-added exports, and implementing the requirements of the quality diktats of the US and EU. While the US is stressing on the establishment of a system with Hazard Analysis and Critical Control Points (HAC CP), the EU has prescribed specific infrastructural requirements.

The Union Government through the Export Inspection Agency (EIA) of the Commerce Ministry, has included HACCP as a pre-requisite for exporters. Since April, a modified national standard for exports has come into force with HACCP a mandatory requirement.

The Chairman of the Marine Products Export Development Authority (MPEDA), Mr. Jose Cyriac, told Business Line that more than 100 units had implemented HACCP and a sampling of these were being visited by the US-FDA team. The situation in the industry had far improved compared to two years ago when the EU banned imports from India.

The Government had brought in a system of verification and provided financial and technical support through MPEDA. About 150-200 units had availed the facility, and 88 units were approved for exports to the EU and 80-90 units were in the pipeline for app rovals, he said.

Last year there had been a team from the EU, and the team which submitted its report recently has put India on the automatic approval list, and expressed satisfaction. Now, the US-FDA team was in the country, and was visiting 10-15 plants.

According to industry sources, the mood was upbeat among them and there was reason for optimism regarding the outcome of the visit.

There was a perceptible shift in the nature of exports of the seafood industry. While bulk exports continued to dominate the Rs. 5,096-crore seafood exports, exports of value-added items were now around 20 per cent compared to about 15 per cent earlier, Mr. Cyriac said.

While the increase was bound to be slow, it was a positive shift. While the US accounted for 18 per cent of India's seafood exports and the EU about 20 per cent with the exports growing, those to Japan had shown a slight decrease and were now around 44 p er cent. Exports to Japan had been as high as 60 per cent a few years ago, industry sources said.

However, the shift to value-added exports was not going to be easy. The super markets and retail outlets would have to tapped directly. There would be no role for the wholesalers, key figures in the bulk trade with Japan. Only big players with establishe d brands would be able to hold on, Mr. Cyriac said.

The sources said many major US companies were taking position in India and were keen on shifting business from South-East Asia to India because major suppliers such as Thailand were getting overcrowded. The US-FDA is planning to conduct programmes in Ind ia with a view to increasing awareness and extending help for implementing HACCP.