June 6, 2020
India sees possible growth in shrimp sector
India's shrimp exports are seen to hike due to possible upcoming global shortages as its shrimp aquaculture sector remains to be one of the country's rising industries, which earns valuable foreign exchange, even in the midst of crisis, Aquaculture Alliance reported.
Rising demand for animal protein safe for human consumption, is on the rise due to the COVID-19 pandemic, which has not only caused a huge transition in the global economy but also affected the shopping behaviour of many people around the world.
India has an extensive coastline of 8,118 km across nine states and four union territories. The country's shrimp-farming area currently encompasses more than 176,000 hectares (ha): about 160,000 ha (91%) are used for Pacific white shrimp (Litopenaeus vannamei) production, some 14,080 ha (8%) for black tiger shrimp (Penaeus monodon) culture and around 1,760 ha (1%) for production of freshwater giant prawn (Macrobrachium rosenbergii).
Data from the Indian Ministry of Commerce and Industry show that on-year shrimp production increased by 31% between 2019 (804,000 tonnes) and 2018 (615,692 tonnes), and that shrimp exports grew by 8% (667,140 tonnes) to various countries, representing 83% of total shrimp production in 2019.
Exports were significantly driven by strong US demand in the second half of last year, and India was the leading supplier of shrimp to the US in 2019. Exports to that market grew 14% on-year with an export volume of 282,584 tonnes in 2019, when compared to the export of 247,783 tonnes in 2018. India exported 159,785 tonnes to China; 73,702 tonnes to the EU; 39,688 tonnes to Japan; 31,727 tonnes to Vietnam; 24,645 tonnes to the United Arab Emirates (UAE); and 56,762 tonnes to other destinations.
According to the Coastal Aquaculture Authority (CAA, under the Ministry of Fisheries, Animal Husbandry and Dairying), there are 311 shrimp hatcheries in India registered to import specific pathogen free (SPF) L. vannamei broodstock from 11 overseas suppliers, with an annual production capacity of 45 billion postlarvae (PLs). There are also 90 nauplii rearing centers (NRCs) with a capacity of 8.12 billion PLs that are registered with the CAA to produce seed for aquaculture farmers.
Approximately 63,430 broodstock animals were imported in the first quarter of 2020, until the COVID-19 lockdown was announced by the Government of India (The Marine Products Exports Development Authority, or MPEDA), with no new imports since lockdown. By March 2020, 16 billion PLs were produced, and of these, some 1 to 1.5 billion animals, were discarded by hatchery operators due to lack of demand by farmers, which disturbed the cycle of shrimp seed production at the hatcheries. We estimate that approximately four billion PLs were produced in April 2020 during the lockdown.
Hatchery operators were not able to produce seedstock during the initial period of the lockdown due to strict regulations on their operations, including various logistics aspects and labor. Also, drivers for delivery vehicles were not available to transport the PLs to distant regions.
Because of the lockdown restrictions, lack of SPF broodstock, reduced hatchery seed production and a huge demand for PLs, seedstock prices increased by around 30% in the last three months, and further increases are possible unless conditions change. It is worth noting that the state government of the State of Andhra Pradesh has set maximum prices for PLs, with shortages expected in the coming months.
Also, if broodstock imports do not satisfy demands, hatchery operators may resort to using farm-reared animals as non-SPF broodstock to produce PLs to meet farmers' demand, and this would obviously affect seedstock quality. Nauplii survival during the summer would be lower, leading to severe shortages (of as many as six billion PLs) in the supply of PLs after May 2020.
In India's shrimp farming industry, the first quarter (Q1) and early second quarter (Q2) of the year are commonly referred to as the summer crop, and this is the most active season for PL stocking. During February and March 2020, farmers were preparing to stock their ponds based on a normal PL supply situation. However, the official COVID-19 lockdown at the end of March significantly impacted the supply of PLs and the subsequent stocking of ponds, which resulted in a drastic fall in raw material prices.
Farm gate prices for shrimp were steady from January to the first week of March 2020. However, prices started to fall during the second week of March and continued declining regardless of shrimp size (counts)—perhaps due to a dynamic international market and caution on the part of buyers—until the end of the third week of April,
In 2019, more than 30 feed companies manufactured shrimp feed and produced around 1.2 million tonnes annually. During the first quarter of 2020, approximately 350,000 tonnes of shrimp feed were produced, but the output for April 2020 was estimated to be 80,000 tonnes, or 40% lower compared to April 2019 (authors' data). With the support of the Government of India, the supply chain is now gradually coming back. The decline in feed production was caused by the COVID-19 regulations, which resulted in a manpower shortage, issues with raw materials' logistics and fluctuating demand in the market.
India's shrimp exports have had continuous growth over the past decade with on-year increases in volume. In 2019, shrimp exports generated revenues of (US) $5 billion (Ministry of Commerce and Industry, Government of India). The country currently has about 366 MPEDA-approved seafood export companies and 60 cold storage facilities. Through March 2020, about 230,000 tonnes of shrimp were produced, of which 180,500 tonnes (78%) were exported to various global markets.