As Ecuador emerges major competitor, India’s shrimp exports to US may take a hit

Ecuador is emerging as a major competitor for India’s shrimp exports to the US, after the Latin American country shifted its focus from China due to Covid restrictions.

Industry officials said China made up 75 per cent of Ecuador’s shrimp market, but the pandemic restrictions have forced them to aggressively market its products in the US, thanks to its proximity to the US coast. This has reduced the shipment transit time, facilitating Ecuador to dump its products in the US markets at lower prices, thereby giving a stiff competition to India.

Shipments from India to the US take around 40 days depending on the ports, leading to increased freight charges and higher landing cost.

Decisive year

According to Nitin Awasthi, Incred Equities, India and Ecuador tried to lock horns to surpass the one million tonnes mark in shrimp exports in CY22. But CY22 belongs to Ecuador with July exports surpassing the mark. The demand for shrimps globally is robust and China is set to surpass the US as the biggest importer of shrimps.

However, the supply in India is not keeping pace with the global demand and this current year, emerging demand will move towards Ecuador if India does not aggressively increase the supply in the first half. The loss of market will be permanent and CY23 will be a decisive year for Indian shrimp market, he said.

Alex K. Ninan, president of the Seafood Exporters Association of India, Kerala region, said, “Ecuador will definitely be a threat to India’s shrimp exports in the days to come and it is time to find alternate solutions to retain the US market. Currently, there is a raw material shortage because several farmers have not carried out farming. Once the situation improves, there could be emerging issues. The sector is anticipating a significant drop in export volume to the US.”

Experts in the sector pointed out that shrimp inventory in the US continue to be on the higher side in the first six months. However, the end of the year is likely to be sluggish. The total import volume to the country reached 508,957 tonnes, a six per cent increase. However, Indian imports to the US dropped in July to 23,617 tonnes. Despite being the largest supplier, the difference with Ecuador has reduced to just 4,000 tonnes.

Drop in revenue

Official figures also pointed out that there was a drop in revenue in shrimp exports to the US market from India to $1,253 million during April-August this year against $1,479 million in the corresponding period of previous year.

Ecuador was the second largest supplier to the US at 19,832 tonnes in July with a stable supply. At a price of $7.42 per kg, it has become the only country supplying at a lower price. Indian price is reported to be in the range of $9.10/kg.

With the easing of stringent import measures, the demand from China for Ecuadorian shrimp has started rising. However, Ecuador continues to look at opportunities for more supply to the US, as they foresee that the Chinese market will continue to fluctuate due to new Covid cases.

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