Indian seafood exports may show lower growth this fiscal as shrimp prices continue to remain low and cautious farmers go slow on production.

 While prices of shrimp, which dominates the seafood export basket, are down by 20 percent  from last year, fear of white spot disease and lower prices had forced many farmers to go for partial harvest, resulting in small-sized shrimps, which fetch lower returns compared with the fully grown ones.

 "Lower prices have discouraged aquaculture farmers from going for more stocking in the farms for the next harvest, which will be done after a few months," said S Muthukaruppan, Former President of Society of Aquaculture Professionals.

Seafood exports had touched a record Rs.45,106 crore last year on the back of high prices and good production of shrimps.

The shrimp production in the country scaled a new peak of 600,000 tonnes, making India the top shrimp supplier globally.

"Following tightening of quality standards in the European Union, exporters were focusing more on the US market. The oversupply pulled the prices down," said Muthukaruppan.

The realization 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 percent) in prices of key varieties, compared to last year.

For one particular variety of shrimp, the price is around $5.40 per kg, 30 percent 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 percent compared to last financial year. The realization 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 percent this financial year, 500-700 basis points (bps) slower than the 23 percent and 25 percent rates in FY17 and FY18, respectively.

US shrimp export realizations (in dollar terms), that account for 70 percent of export value, are also expected to fall by 10 percent 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 stabilize 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.



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