Exporting Frozen Shrimp Fish............
HS Code : 03061790
Early mortality syndrome, which attacked Thailand’s shrimp industry in 2012, opened doors to opportunities for Indian shrimp exporters. And they capitalised on it. Today, India is the world’s largest exporter of frozen shrimps and prawns, and its share in world exports is growing like never before!
If you are getting ready to relish a shrimp dish for dinner tonight - wherever you may be - chances are very high that the shrimps have been originally farmed, sourced and processed in India! As the world’s leading exporter of frozen shrimps and prawns, India has for a long time been the preferred choice for importers across the globe, particularly from US, Japan and Vietnam, among others. Having said that, with various regulatory measures playing spoilsport, the year 2016 has been somewhat mixed for its exporters in India.
Earlier in March 2016, US had hiked the anti-dumping duty on frozen shrimps entering its market – for India the duty increased from 2.96% to 4.98%. This was expected to have a direct bearing on India’s exporters as US is the largest market for Indian shrimps. However, the duty was soon rolled back in September, a move that calmed the nerves of many exporters who depend on the US market.
Other than the unpleasant experience with US, the exports business of shrimp has shown a steady performance over the last few years. India’s exports of frozen shrimps (of the variety that is most exported by India, HS Code: 03061790) has gone up from $1.01 billion in FY2014 to $1.22 billion in FY2015 and then to $2.40 billion in FY2016 – a growth of almost 97% from the previous year and over 136% from FY2014 (Ministry of Commerce, GoI, data). Exports of scampi (a variety of prawn), however, fell from $2.37 billion in FY2015 to $0.56 billion in FY2016, bringing down the overall export number across the shrimps and prawn category.
Data also shows that US, Vietnam and Japan have been the top markets for Indian frozen shrimp and prawn exporters for the last few years. And the last financial year was no exception. In FY2016, US clearly lead the pack, importing shrimps and prawns worth $998.82 million from India, followed by Vietnam and Japan that sourced shrimps and prawns worth $361.92 million and $279.61 million respectively from Indian suppliers. So what is it that makes India a preferred sourcing hub for decapod crustaceans?
The reason for the increase in shrimp exports is the introduction of ‘vannamei’ shrimps in India’s export basket, which are in high demand globally. A conservative export estimate by Marine Products Exports Development Authority (MPEDA) suggests that India produces about four lakh metric tonne of vannamei every year. The production is at par with that of Thailand, which has traditionally been the leader when it comes to vannamei
Further, the demand for frozen Indian shrimp in overseas markets has also increased significantly due to the excellent quality of the product, and on the back of the assurance that a regular supply of the product can be made from India to these markets.
India’s status as shrimp exporter has grown significantly over the years, and is today the world’s largest supplier of frozen shrimps. What’s more? In the recent times, the country has also emerged as the largest exporter of shrimps to the world’s biggest market US – especially, after the early mortality syndrome (EMS) disease hit Thailand’s shrimp production in 2012. In fact, as of today, nearly 40% of the shrimp exported from India lands in US. But then, isn’t over-dependence on a single big market a cause of concern for Indian shrimp exporters? Really, should you put all your eggs in one big, foreign basket?
Dependence on any market is related to the consumption and demand in that market. US is a very important market, but then there are other markets that also require Indian shrimps and the supply to those markets has been increasing with every passing year. For instance, China’s demand has gone up substantially in the current year and so has India’s exports to China
Alternate markets, such as US, Japan, China, Russia, South Africa and other far-east and middle east countries have always been there, which can absorb volumes, and there is a demand in those markets that we can fulfil
Exports of frozen shrimps and prawns contribute significantly to India’s forex earnings. However, there is a need for constant value-addition to stay ahead of the curve in the face of competition. Setting up of Specific Pathogen Free (SPF) Brood Stock multiplication centres, will go a long way in reducing costs to the farmer and increasing profitabilities.
Increased power supply and dredging of creeks in coastal areas are important infrastructure requirements that will boost trade for shrimp exporters. Policymakers also need to look at the high power tariffs. Price uncertainties that lead to additional cost of storage, shipment delays and the absence of quality control at production centres are also causes for concern. Despite these challenges, Indian exporters of frozen shrimps are excited about the year ahead. Reason? The world just loves Indian shrimps!
We must improve the cultivation pattern in the east coast. Farms in the west coast are better organised and farmers are aware of the productivity standards, breeding size and patterns. The farms in the west coast harvest two crops a year, and with proximity to the sea the shrimps taste better and the water availability concerns are less. Whereas, in the east coast, traditionally, paddy fields are converted into farms, which leads to many problems. Farmers are not organised there and they cultivate three crops a year, which ruins the yield. East coast farmers focus on harvesting smaller size shrimps while west coast focus on harvesting larger size or full-sized shrimps.
The demand for frozen Indian shrimp in US and other overseas markets has increased significantly over the last few years due to the excellent quality of the product, and also on the assurance that a regular supply of the product can be made from India to these markets. To consolidate its position, India now needs to focus on exports of value-added aquaculture products. In fact, huge investments in equipment have already been made by many exporters to move up the value chain. The productivity of labour too needs to be improved. Our policy for encouraging export of value-added products also needs to be reviewed objectively.
A new entrant in this segment could look for opportunities in the resource sector, as opportunities in processing and export are getting saturated. Setting up of shrimp broodstock multiplication centres, as well as artemia and polychaete culture and intensive shrimp farming with advanced techniques, offer good opportunities to entrepreneurs.