India’s seafood exports to China are reportedly facing the brunt of resistance with shippers citing delays in the clearance of marine product consignments in the recent past.

Shaji Baby John of the Kochi-based Kings Group said that several exporters have signed forward contracts with parties after healthy enquiries in April from China, a major market for shrimps. But in the last 15 days, there has been a deliberate attempt to delay inspection of Indian containers under the pretext of Covid supervision. The situation has risen in the backdrop of border skirmishes, he said. It now takes more than 10 days for cargo clearance against the normal three-day process.

“Thousands of Indian seafood containers are now waiting for clearance at various Chinese ports. Because of the unnecessary regulations, buyers in China have asked us to go slow, even as they have evinced interest in buying our materials”, he told BusinessLine .

Price drop

After the US, China is the biggest buyer of Indian shrimps. Currently, they are procuring only smaller size shrimps due to the low availability of bigger types. This has resulted in a price drop of nearly 10 per cent, forcing farmers to slow down their crop, he said, and requested the government to resolve the crisis at the earliest to recoup the Chinese business.

China has emerged as a prominent buyer of Indian seafood with exports reaching $1 billion in 2019 compared to $700 million in 2018. Exports had registered the highest growth of 42 per cent, thanks to steps initiated by Marine Products Exports Development Authority by organising buyer-seller meets and seafood expos.

“We are keeping our fingers crossed,” said Alex K Ninan, president of Seafood Exporters Association of India-Kerala region. Many exporters believe it as a fallout of border disputes. All these developments, coupled with the slowdown in the US procurement has contributed to the price drop, he added.

Inventory build up

Reacting to the slowdown in the Chinese markets, another source in the sector pointed out that China is nursing a burden from increased inventories following import of large quantities in April and May. Moreover, they have started sourcing raw material from Ecuador, which is selling $1 to $1.5 cheaper compared to Indian prices.

D Ramraj, president, All India Shrimp Hatcheries Association attributed the price drop to factors such as declining exports to China and the rise in Covid cases in the US, which have impacted the food service sector. Moreover, there is increased supply from Indonesia, which has become the top shrimp exporter to the US, a position that India has held for long.