India’s shrimp exports registered a 23 per cent drop in dollar terms and 16 per cent in rupee terms year-on-year in July, mainly due to lower supply.
Though shipments to the US continue to dominate, exports to the country declined by 14 per cent, said Equirus Securities in its latest report on the aquaculture sector. The exports to China tanked to 5 per cent, as sales plummeted 80 per cent.
The report attributed the reason for lower exports to reduced supply of farmed shrimp following the completion of the first crop as well as the delay in second crop. Labour issues in some of the seafood processing companies are also a contributing factor for lower exports, as it affected the capacity utlisation of these units.
According to the report, the subdued demand in China has led to a multifold increase in exports to countries such as Israel, Italy, Korea, Vietnam and the UK. To reduce the dependence on China, the Equirus report pointed out that Indian exporters have started exporting to new geographies such as Israel, Italy, and South Korea etc.
However, sources in the seafood export sector told BusinessLine that the Chinese market has been slow in the recent period reportedly because of the cash crunch. Moreover, the decision of US-based seafood companies to shift their base to Vietnam and Indonesia on account of the US-China standoff also led to a drop in procurement from countries like India.
Covid impact
On the subdued demand in the US market, the sources pointed out it is now sourcing only small size shrimps for household requirements. The Covid lockdown and closing down of way-side eateries and restaurants has impacted purchase of big premium-sized shrimps in the US. The demand for this particular variety of shrimps has come down in the European and Japanese markets as well, forcing exporters to reach out to newer markets such as West Asia. Although Africa is a good market, the lockdown has reduced the purchasing power of people.
The sector is now facing a raw material shortage in many seafood processing factories in Kerala and the West Coast, as they mainly depend on sea catch. Though the authorities have lifted the annual trawling ban, the restrictions on fishing activities due to Covid and the resultant closing down of fishing harbours hampered the operations of many processing units. Coupled with this is the labour shortage in fishing boats as the crew is mainly from Tamil Nadu. The Covid restrictions hindered their free movement from Tamil Nadu to Kerala, the sources added.
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