Agri Business

Indian seafood exports hit the Great Wall at Chinese ports

V Sajeev Kumar Kochi | Updated on August 02, 2021

Shippers begin to focus on other overseas markets to remain competitive

Inconsistencies in shipments to China, the second largest importer of Indian marine products, seem to have landed Indian seafood exporters in trouble, prompting them to focus on other overseas destinations to remain competitive.

Many exporters are shipping seafood consignments to other developed countries because of the inordinate delay in Customs clearance at the Chinese ports and the time lag taken for getting payments.

China is the market for small-size shrimps, which constitute about 40 per cent of the total crop, said Elias Sait, Secretary General, Seafood Exporters Association of India. Other markets in the US, Japan, and EU consume medium and larger sizes.

Aquaculture farmers, depending on the area and the weather, have a crop pattern of small sizes in some areas, and a mix in other areas. Therefore, the market for small-size shrimps is very critical for the viability of aquaculture operations, and for market price stability of all sizes, he said.

“If the conduit of sale for a significant portion of the sizes of the aquaculture output is blocked, it results in total stoppage of all aquaculture operations due to this serious imbalance in marketing of the full-size range of the product”, he said.

As a consequence of the developments in China, Sait said the present crop is being extended to increase the size and weight of the shrimp, which results in heavy mortalities due to disease and overloading of high densities, which cannot withstand a longer duration of crop.

‘Blessing in disguise’

“The emerging situation can be considered as a blessing in disguise to sell our products in other countries, thereby going up in the global value chain, benefiting India’s seafood sector in the long term”, Shaji Baby John, Chairman, Kings Infra Ventures, a leading Kochi-based seafood exporter, said.

China, he said, is a low-priced and highly inconsistent market. The seafood varieties from India are moving as raw material to reprocessing factories to make high-value products for re-exports to other developed countries. “Why not India process these high-value products domestically and market directly to other destinations by curtailing the supply to China”, he told BusinessLine.

Covid, sluggish overseas markets, hit India’s seafood exports in 2020-21

Chinese procure Indian shrimps at cheaper rates through selective buying and withdrawing from the market at the peak harvest time. The Chinese processing factories will have no other options but to stop production if India stops its supply to China, he said.

In the last fiscal, exports to China fetched ₹7,000 crore.

Two-level inspections

Shippers’ concern comes in the wake of frequent suspension of frozen seafood consignments from India after the detection of coronavirus nucleic acid on the outer packaging materials in the shipments.

Vizag Port continues to lead in seafood exports

However, official sources pointed out that the Chinese authorities have deferred stringent checking on Indian consignments following the intervention of the Marine Products Exports Development Authority of India. But still there are two-level inspections — both at Customs and local body levels, resulting in slowdown in exports.

Shaji Baby John said that the Indian seafood sector is mainly confined to small farmers and SSI units which do not have much holding power or storage capacity and Chinese firms are taking advantage of it. A few large corporates operating in the sector are focussing mostly on the US markets.

The problems in China will hit lakhs of farmers, who will lose their livelihood, in Andhra Pradesh, Gujarat, Tamil Nadu, Odisha, West Bengal and other States who may skip the next crop, besides causing immense hardships to processing workers, hatcheries and feed mills, Sait added.

Published on August 02, 2021

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