India unlikely to meet FY24 Seafood export target of $9.25 billion

Nov 30, 2023 India Shipping News

NEW DELHI : India is unlikely to meet its seafood export target worth $9.25 billion for FY24. Though there has been a slight improvement in exports in the last couple of months, the overall sentiment continues to remain sluggish.

The second half of FY23 seems to be holding some promise, after a slowdown in exports by over 5 percent in value from April to October 2023, at about $4.5 billion, year on year (YoY), according to market reports.

Though there was an increase in volumes during August and September, and a 4 percent  YoY  improvement in October 2023, at $778 million, the export community is doubtful whether it can be sustained. India’s exports touched $8.09 billion in FY23 and the target for the current year is $9.25 billion.

What led to the decline in buying

Buying by the US, China, Japan, and Europe markets is tepid. The US is getting a lot of shrimps from Ecuador cheaply as transportation costs and the time needed for delivery are less. During April-October 2023, exports to the US decreased by 6 percent, exporters said. The US is the leading buyer of Indian seafood.

“Christmas and New Year shipments are over. We get a supply order for 10-12 containers for the period, which are later cut by half. Weakening of the yen against the dollar has reduced the buying capacity of Japan. The Chinese market is also dull,’’ said Basheer Sait, Chief Executive of Salamath Food Exports.

Weak demand for peeled frozen products in the US retail market is expected to keep prices down. Exporters see no substantial improvement in the US market until early 2024 as it is saddled with a big inventory.

Another threat emerged in October when the American Shrimp Processors Association (ASPA) called for anti-dumping duties on imported frozen warm water shrimp from Ecuador and Indonesia, along with countervailing duties on shrimp imports from Ecuador, India, Indonesia, and Vietnam.

The seven months of export till October 2023 to Europe is also down 19 percent YoY. Apart from lower demand, Indian exporters are also facing stringent regulations on antibiotic issues in Europe.

Europe is insisting on 50 percent sampling of consignments to detect antibiotic traces.

Rise and fall in Chinese market

Seafood exports to China rose 7 percent during April- October 2023, mostly due to the 38 percent rise in shrimp imports in September 2023 from the previous month.

However, China is facing challenges with sluggish end-market demand, high inventory levels, and devaluation of its currency against dollar. The general demand for shrimp in the Chinese market has declined, leading to a downfall in prices. India is the second-largest supplier of shrimps to China after Ecuador.

Export body hopeful, take initiatives to boost business

Based on the improvement shown in the last few months, Marine Products Export Development Authority (MPEDA) chairman D V Swamy expressed hope that exports could touch last year’s level and could even surpass it slightly.

On the sidelines of a function organised by MPEDA for value-added seafood in Kochi last week, he said volumes increased 17 and 19 percent, respectively, in August and September, YoY. However, higher volumes have come at a low cost. But prices have stabilised by the end of September, he added.

MPEDA reckons that India can raise its export earnings and combat competition effectively by raising its share of value-added seafood, which is currently around 10 percent of the total export. “We are aiming at doubling it by 2030,’’ Swamy said.

In the process, the country can compete with Ecuador which sells mostly raw seafood in the US. Thailand, Vietnam and China have already reached 20 percent value addition in seafood exports.

Training for making value-added products

As part of the initiative, MPEDA is conducting a series of training sessions for making value-added products under the guidance of experts from Vietnam in seven locations on the west and east coasts of the country, starting in Kochi from November 21 to December 17. The idea is to train 25 participants from various processing units on product-preparation techniques, so as to make 22 value-added products at each location.

According to Swamy, India’s share of $8 billion accounts for 4.3 percent of the global seafood market, worth $189 billion. But the country’s share works out to 0.86 billion (2.5 percent) of the global value-added seafood products market worth $34 billion.

The slack market has impacted the production of aquaculture shrimp that makes up a major share of seafood export from the country. “Production could be around 7.5 lakh tonnes this year, I feel. The Vannamei shrimp price that was going steady in the last few months has dropped by Rs 30 to Rs 220 per 100 counts this month,’’ said L Satyanarain, former president of the All India Shrimp Hatcheries Association. Last year, Indian shrimp production touched 9 lakh tonnes.

The import of shrimp broodstock has come down this year, which is an indication of lower production, he added.  “I think it may take around a year for things to get back to normal. We may see higher exports in FY25,’’ he said.