January 3, 2018

Indian shrimp exports going stronger

Indian shrimp exports are likely to surpass 0.55 million tonnes in fiscal year 2018 (April 2017-March 2018), a 30% increase from FY 2017's 0.43 million tonnes, a report by the rating agency Icra said, India's Business Standard reported.

The increase is attributed to strong orders, despite negative sentiments resulting from a ban on Indian shrimps by some countries including Thailand.

"Following 19 percent volume growth registered during FY17, the trend continued in the first half of FY18 (April-September 2017) with volumes growing 33.6 percent year-on-year", Icra said, adding that India currently accounts for 35% of the global frozen shrimp exports.

In FY 2017, frozen shrimp exports from India grew 25% year-on-year to Rs24,370 crore (US$3.84 billion) from Rs19,492 crore ($3.070 billion) in FY 2016, helped by a 19% year-on-year volume growth.

The US Department of Commerce's reduction of the anti-dumping duty on Indian shrimps from 2.2% (ninth administrative review) to 0.84% (10th administrative review) in September 2017 is expected to support exports growth to the US, according to the report.

It added that the weak production dynamics in Vietnam, coupled with increasing demand in Japan and the EU - top two export destination for Vietnam - is also expected to push up growth.

The report said Indian shrimp exports to China is likewise expected to grow due to lower domestic production in China in 2017 owing to persistent disease issues.

The recent bans on shrimp imports by Thailand and Kuwait, meanwhile, will have a negligible impact on the Indian frozen shrimp industry, as they constitute only 0.3% (Rs43.5 crore, or $6.85 million, in first half of FY18) of the total frozen shrimp exports from India.

"Also, majority of the Indian exports to Thailand are for further re-processing and are in the medium count range (31-40 counts). But closely following the Kuwait ban, the Thailand suspension could impact public perception of the quality of Indian shrimps; this needs to be watched," said Pavethra Ponniah, vice president and sector head (corporate sector ratings) of Icra.