The realisation of export proceeds of shrimps nose-dived to hit the bottom-line, affecting stakeholders across the supply chain in the $5-billion seafood export market.
The export prices of shrimps, the key contributor to the country's seafood basket, have plunged by more than 20 per cent in the last couple of months because of increased supply from competing nations such as Vietnam, Thailand, and Ecuador.
Exporters are saying there has been a sharp drop of $2 per kg (30 per cent) in prices of key varieties, compared to last year.
For one particular variety of shrimp, the price is around $5.40 per kg, 30 per cent lower than last year, said an exporter on condition of anonymity. The falling rupee has not been able to help much, said the exporter.
Shrimp farmers, especially in Andhra Pradesh, are forced to harvest one crop against the usual practice of three crops annually. They are suffering huge losses and even suppliers of fish feed are bearing the brunt of the production squeeze. Hatchery owners are also likely to feel the heat.
"The export rates for Indian shrimps have plummeted by more than 20 per cent compared to last financial year. The realisataion of export proceeds is likely to be affected. It won't be as good as it was in the last two years. It will take time for demand to catch up. The vertically-integrated player will definitely survive the present scenario," an exporter said. There will be a sharp reduction in the turnover this year, said an official of another export company.
According to a report by Crisil Research, seafood exports will grow 17-18 per cent this financial year, 500-700 basis points (bps) slower than the 23 per cent and 25 per cent rates in FY17 and FY18, respectively.
US shrimp export realisations (in dollar terms), that account for 70 per cent of export value, are also expected to fall by 10 per cent in financial year 2019.
The alarming condition of the aquaculture sector has prompted N. Chandrababu Naidu, chief minister of Andhra Pradesh, the largest shrimp producing state in the country, to seek the Centre's help to come up with an action plan and stabilise procurement prices. The Centre has been asked to initiate steps to trade with new markets in Russia, South Korea, and Australia to arrest further slump in prices. Exports to major markets have reportedly declined drastically because of issues related to antibiotic residues. The fact that India has emerged as the largest exporter of shrimps to the US has not helped in checking the price fall.
In a letter to Union Commerce and Industry Minister Suresh Prabhu, Naidu has sought a mechanism to eliminate intermediaries between shrimp producers, processors and exporters. Rising prices for fish feed, lime, bleaching powder, medicine, daily wages and energy costs and the drop in shrimp prices have added to the miseries of shrimp farmers in Odisha, too. They are staging protests seeking CM Naveen Patnaik's aid in this regard. They are demanding a minimum support price for shrimps or a subsidy of Rs 40 per kg for verified production.