August 28, 2023

Indian aquaculture stocks surge as China suspends Japanese aquatic imports

Indian aquaculture companies, including Waterbase Ltd, Venky's India, and Apex Frozen Foods, have experienced notable gains in their stock prices following reports of China's suspension of aquatic imports from Japan, The Hindu Business Line reported.

The stock price of Apex Frozen Foods Ltd surged by INR 6 (~US$0.073; INR 10 = US$0.12), reaching INR 224 (~US$2.71), while Waterbase Ltd observed a price increase of INR 5 (~US$0.061), reaching INR 85 (~US$1.03), even in a sluggish market.

Additionally, smaller stocks like Zeal Aqua Ltd from the same segment registered a 3% uptick, as confirmed by Akshay Agarwal, managing director of Acumen Capital Market based in Kochi, India.

Although some stocks in this sector are trading slightly lower compared to yesterday's closing prices, the sustained ban could have a favourable impact on companies exporting seafood and aquaculture products to China, Agarwal said.

The decision of Chinese authorities to halt seafood imports is a response to Japanese Prime Minister Fumio Kishida's announcement of plans to release approximately 1.3 million tonnes of treated wastewater from the decommissioned Fukushima Nuclear Power Plant into the Pacific Ocean. Despite the Japanese government asserting the safety of this disposal method, the ban on Japanese imports opens doors for other supplier countries, including India, according to Vincent Ka, a research analyst at Geojit.

China, as the world's second-largest aquatic product importer, relies heavily on Japanese seafood imports, which totalled US$600 million in the previous year. While India is a significant shrimp supplier, China mainly imports fish, crustaceans, mollusks, aquatic invertebrates, dried, salted, and smoked fish, as noted by K Dinesh, head of the aquaculture department at Kerala University of Fisheries and Ocean Studies.

The implications of India's potential benefit from the import ban are yet to unfold. The possibility of replacing the suspended Japanese imports with Indian products exists, but the reported slowdown in the Chinese economy may impact imports, given their reduction in various shipment categories, Dinesh added.

-      The Hindu Business Line