Diseases take toll on Indian shrimp, exports to US may narrow to 7%

Exports of Indian shrimps to the United States are likely to slow down, with growth narrowing to about seven per cent to 230,000 tonnes in 2018. 

Between January and December 2017, India exported about 213,981 tonnes of the seafood, about 39 per cent more than the figure clocked in 2016.

Indonesia, the second largest exporter of shrimps to the US, is expected to grow by 15 per cent during the calendar year, according to an industry report.

Over the past five years, Indian exports to the United States have clocked about 26 per cent compounded annual growth rate (CAGR).

The US is the largest market for Indian exporters. Industry sources attribute the single-digit growth to shortage of material.

“It is a projection, the growth rate may be even lower. Material availability has gone down due the prevalence of diseases. Even with prices firming up, farmers are reluctant to stock again due to the ensuing winter season and the losses they have made in the past,” said said Durai Murugan Balasubramanian, secretary, Shrimp Association, Tamil Nadu.

Farmers have mostly stayed away from stocking as shrimp prices had fallen below production cost in Tamil Nadu, Andhra, Odisha, West Bengal and Gujarat at the farm gate during the first quarter.

Due to fall in the rates, Marine Products Exports Development Authority (MPEDA) was forced to come out with the pricing of Vannamei shrimp, the key contributor to the seafood exports basket.

Though seafood exports had crossed $7 billion the last fiscal, trade sources are expecting a fall in the quantity and value of exports this year.

Challenging times are also ahead for Indian exporters as US has recently amended a law directing the Food & Drug Administration (FDA) to spend an additional $3.1 million in fiscal 2019 on the agency's inspection of imported seafood at the border and the source of supply on foreign soil.

The additional $3.1 million in funds would increase the FDA's spending on these activities to $15 million, or 26 per cent over the funding allocated to the agency in FY2018.

Trade sources said that with the new amendment, FDA may be more aggressive in conducting the inspection, leading to increased rejections of consignments and impacting exports.

Tightening of inspection will also force Indian exporters to maintain more checks and balances for exporting to the US.