Exporting Frozen Cuttlefish.......
HS Code: 03074990
India is unquestionably known for its exports of frozen shrimps and prawns. However, there is another category of seafood product that is fast gaining recognition the world over – cuttlefish and squid. This category is already contributing 5% to India’s total seafood exports basket.
Can you name a dish made from cuttlefish or squid? Probably not. That’s because these items have never traditionally been a vital part of Indian cuisine. They perhaps will never be. Well, some authentic Spanish, Italian or Thai restaurants serve cuttlefish and squid even in India, but frankly speaking, India is not the best market to promote these products. On the contrary, if you speak with the Spaniards, Italians, Thais, Vietnamese, or even Americans, they will tell you that cuttlefish and squid are delicacies in their home countries. And they are also the largest importers of these seafood products.
Seafood, including squids and cuttlefish, play an important role in the Indian economy as it generates an enormous amount of employment in our coastal states while also contributing big time to the country’s exports. For the record, National Fisheries Development Board reports that India ranks third in fisheries and second in aquaculture in the world. And together, they account for roughly 1.07% of the Indian GDP.
As for the export of cuttlefish and squid, the number may not be on par with those of frozen shrimps and prawns – which India is widely known for. But on the positive side, the potential for growth in this segment is huge.
China is no doubt the big daddy when it comes to exports in this segment, clocking over $2.23 billion in CY2016. However, India’s growth has also been meteoric. Between FY2016 and FY2017, India’s exports of cuttlefish and squid leaped by 59.33% with exports touching $504.97 million in FY2017.
Cephalopods, including cuttlefish and squid, are one of the major seafood export items from India. During FY2017, frozen cuttlefish and squid accounted over 5% (by value) of the Indian total seafood exports. And in terms of volume, the two accounted for 9% and 7%, respectively, of the seafood export basket
Vietnam, Spain, Italy and Thailand are India’s main export destination. And while squid is slowly finding its way into the domestic market, cuttlefish remains an export-only product.
A discussion on exports simply cannot begin without referencing to the elephant in the room, China, which is the largest exporter of cuttlefish and squids in the world. Interestingly, the country is also the fourth largest importer and the largest consumer of cuttlefish and squids in the world. Despite India being the second largest exporter of the product in the world, there is absolutely no way India can presently compete with China. The reason - Indian exporters are constrained by many factors.
India has exhausted almost all its resources in the shallow waters. While other countries have been exploiting our territorial waters for years, we do not have the resources or infrastructure to explore our own natural deep-sea resources. China has been, for long, fishing in the deep sea, which puts them at an advantage as not only are the catches large, the deep waters also offer a wider variety of marine produce.
The catch determines the market price. When the catch is low, the price goes up and vise versa. So, it is difficult for Indian exporters with small catches, to compete with countries that offer the same product at a lower price. Exporters must get proper health certificates either from Export Import Council (EIC) or agencies approved by MPEDA (Marine Products Export Development Authority) mpeda.gov.in , its really good product with good profit margin but startups starting with low budget can't opt for this product as in order to get MPEDA Certificate one needs to provide 15,00,000 INR as a bank guarantee for 5 years then licence for marine exports would be issued to you.
Q. Why such a huge bank guarantee is demanded by governemnt for marine products export ?
A. Earlier there was not such a problem one can get MPEDA Certification in 5000 INR but there are may fraud exporter entered into this business. We all know that liability of exporter is only uptil FOB, i.e when he safely load the goods into vessel exporter is safe, now if importer receives poor quality of goods he will incure loss. with the help of power and money exporter load poor quality of goods and make certification of best quality loaded as demanded, exporter gets all money but importer suffer loss. due to which the reputation of Indian marine exporter was reducing which was creating bad impact in nation, so governemnt decided to take 15,00,000 as BG , so if suppose any fraud arrise then MPEDA has set up commety and if exporter is found guelty his amount would be deducted from bank and provided to importer.
Q. Do we need to give any bank guarantee to government before exports of other products ?
A. NO, as of now for only marine products export needs bank guarantee for 5 years
Q. How importer can be safe if he imports in FOB ?
A. In FOB Exporter responsiblity and cost is only upto loading into vessel , if importer wats be to safe then he must buy Insurance ICC Cover A, covering all risk & importer must also ask for SGS Lab test report done COC (Certificate of Conformity) at a port before realizing the payment to exporter via bank.
Now lets get back to Frozen Cuttlefish.........
Alongside, to provide consistent seafood products, MPEDA has established Enzyme-Linked Immunosorbent Assay (ELISA) Lab facilities in the coastal states. These labs conduct pre-harvest screening test of banned antibiotic substances, a means to standardise quality.
Exporters can approach the council for consultation for quality control at any point in time
"Cuttlefish and squids account for over 5% of India’s total seafood exports"
MPEDA alongside providing financial assistance also offers various training programmes to technologists. It also has outreach organisations such as Network for Fish Quality Management and Sustainable Fishing (NETFISH) and National Centre for Sustainable Aquaculture (NaCSA) to impart training to farmers, manufacturers, exporters and those involved in the industry to improve quality of the product.
While squid is slowly making an entry into Indian cuisines, especially in the South, Cuttlefish
remains an export-only product with Vietnam and Spain being India’s biggest export markets.
Despite the many challenges, the industry has been continuously attracting entrepreneurs. Perhaps what Indian exporters of cuttlefish and squids needs to now learn is the art of value addition from their South-East Asian counterparts in Indonesia and Malaysia.
Indian exporters need to focus on value addition to sustain growth. Importers across the globe also need to be made aware that Indian fisheries too can produce high-quality products.
Once Indian exporters start exploring more of the deep sea alongside practicing sustainable aquaculture, they can easily give Chinese a run for their money in this segment. There is a vast sea of opportunities in front of them. And all they need to do is take the plunge!