January 17, 2018
A black tiger in the tank: Indian shrimp output revs back up
High prices and black tiger shrimp shortfalls coincided with a new generation of hardier government-subsidized breed stock. Even so, India has yet to get past current Pacific Whiteleg production bottlenecks.
By Eric J. Brooks
An eFeedLink Hot Topic
After a mid-decade slowdown caused by a coincidence of stocking density issues, disease control problems and trade barriers, India's export-driven shrimp industry is once again booming. This is quite a change from a few years ago, when it was feared that escalating problems white spot syndrome virus (WSSV), EHP and other diseases would force Indian growth to level out.
For a while, it did appear to do exactly that. By late 2015, industry sources at conferences warned that the country's Pacific Whiteleg shrimp output would 'level out' near 400,000 tonnes. While the fears turned out to be exaggerated, the industry's long-term sustainability is not yet assured.
Even so, after flattening out around the 350,000 to 380,000 tonnes range, export growth has made an aggressive comeback. From a USDA estimated 383,000 tonnes in 2015 (of which 360,000 tonnes was farmed), shrimp exports jumped 14.5% to 438,500 tonnes in 2016.
Early projections indicate they rose to around 460,000 tonnes in 2017 and will rise to around 555,000 tonnes. Farmed shrimp exports did even better, going from 363,000 tonnes in 2016 to 432,000 tonnes this year, with India's government projecting them to rise by 25% to 30%. While private analysts are more conservative, even here the consensus sees them rising by over 20%, to at least 520,000 tonnes. Hence, while Ecuador and India both exported the same amount of shrimp just two years ago, the former now ships over 100,000 tonnes or 20%+ more shrimp than the latter.
In retrospect, some of Indian shrimp farming's fears and difficulties were overstated or merely cyclical. Difficulties in controlling diseases and boosting output coincided with an El Nino-induced dry monsoon. That worsened the industry's difficulties in late 2015 and early 2016.
Since then, Indian shrimp farms have benefitted from the coincidence of better weather fortuitous world market circumstances, and irony. After spending the better part of a decade transitioning to Pacific Whiteleg cultivation and away from black tiger shrimp, the latter has come to the industry's rescue.
Due to its superior feed conversion and disease resistance, the late 2000s saw India shift from near 100% exclusive cultivation of disease-prone large black tiger shrimp to white leg shrimp. On one hand, from 1,000 tonnes and 1% of output in 2009, Pacific Whiteleg accounted for 55% of farmed shrimp output by 2013, 88% in 2016 and over 90% of 2017's production. Having partly overcome its production constraints.
On the other hand, from 99% of all shrimp grown and a peak output of 146,000 tonnes in 2007, black tiger shrimp output fell to 68,900 tonnes and 16% of farmed shrimp production in 2015. At that time, analysts were expecting India's annual black tiger shrimp production to sink to around 10,000 tonnes and stay at that low level, but it was not to be.
India's once large share of the world market was mostly taken over by Vietnam --until Vietnam ran into production difficulties of its own. High Chinese and US demand for tiger shrimp coincided with a Vietnamese production shortfall, leading to very high black tiger shrimp prices. By mid-2017, black tiger shrimp were selling at a US$1.50~US$2.00/kg premium to Pacific Whiteleg shrimp.
Tired of dealing with escalating Pacific Whiteleg production issues, the past two years have seen many Indian farms shift part or all their output to the cultivation of black tiger shrimp.Instead, black tiger shrimp production will have increased by nearly 45% in three years, from 68,900 tonnes in 2013 to around 115,000 tonnes this year.
And there is more to this than rising returns on black tiger shrimp. In the years when its production was declining, India set up programs to improve the breeding, genetics and farm management techniques of black tiger shrimp. Time will tell if they fall prey to disease as easily as their predecessors did.
For now, black tiger shrimp's inferior feed conversion ratios and growing time are being offset by higher export returns and the diversification of risk made possible by not relying solely on Pacific Whiteleg shrimp.
In the long run, Pacific Whiteleg shrimp still beckons: They can withstand three to four times higher stocking densities and yield approximately three times more protein per hectare. While production costs are twice as high with white leg shrimp, the higher revenues make for profit margins more than 2.5 times wider than with black tiger shrimp.
The good news is that by most measures, India has developed less than a tenth of its potential shrimp pond acreage. The bad news is that such capacity expansion requires substantially higher returns than the mere boosting of stocking densities.
Hence, while a rebound in black tiger shrimp has enabled a resumption of raid production and export growth, shrimp productivity per acre has clearly levelled out, nor does it show signs of recovering. It means that going forward, higher than normal market returns are needed to justify the opening up of new areas or yesteryear's more rapid output growth –but black tiger shrimp prices cannot stay high forever.
One day, black tiger shrimp prices will fall back to normal, long-term levels. That will put an end to India's black tiger shrimp production boom --and its current cyclical production upturn. For now India is set to enjoy fast rising shrimp production through 2020. When India --and the world-- will finally get its Pacific Whiteleg production issues under control, no one knows.
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