Vegetarians might be giving this sector itself the complete miss but looks like those eating non-veg, especially seafood give two hoots.
The cycle has turned for the aquaculture sector. Eighteen months ago, the biggest export market for Indian shrimps, the USA, put a spoke in the wheel with the Seafood Import Monitoring Program putting a ban on shrimps caught by vessels not fitted with turtle excluder devices. And even after the situation was corrected, the entire H1FY20 was muted as inventory piled-up in US and Japan – there had been overbuying ahead of the festive season in Nov-Dec’18.
The tide is turning now. Price and demand for Indian shrimp in the US has been on the rise – in Oct, export volume to US rose to a record 32 million kgs. The price, which had hit a new low at $8.7/kg has now recovered by 10%. This is a harbinger of good news for the sector as it means demand is on the rise and exporters and farmers will get much higher realisations that what they did in entire 9 months of FY20.
Waterbase, the Thapar group aquaculture company had put out a very optimistic report along with its Q2FY20 earnings. It has rightly said that introduction of P. Vannamei (White shrimp) was the key catalyst for India‘s robust performance. Erstwhile key suppliers like Thailand and Vietnam were affected by breakout of EMS, leading to disruption in global supply thereby providing a window of opportunity to Indian farmers & exporters.
The company had very clearly stated then that lower prices and diseases had resulted in lower stocking of shrimp larvae during the first half of the fiscal. After declining in 2018, International shrimp prices have risen near 20% in the past six months. However, the revival in demand and shrimp prices has buoyed farmers sentiments who is now looking forward to a positive second crop.
India‘s exports are likely to witness early double digit growth rate on the back of strong demand from USA and China. There is heavy shortage of shrimp in the international market owing to lower than the expected production level due to various weather events leading to acute shortage.
India’s seafood exports in FY19 were at 1377 mtpa and till 9MFY20, exports have already crossed previous full year at 1393 mtpa. With one more quarter to go, clearly, the outlook is bright.
USA accounted for 42% of total exports, followed by SE Asia at 19% and EU at 11%. Japan was at 6% and Middle East at 5%. Exports to China were also pretty robust at 11%.
Avanti Feeds had also issued a positive outlook during the conference call, saying that shrimp export prices have stabilized and farm gate prices of shrimps are also improved significantly.
India’s vast coastline, favourable climatic conditions, availability of farm labour and a gradual move up the value chain are make India a key supplier in the global shrimp industry.
So we can be sure that this is one sector which will give us some good earnings for Q3 and Q4. Well, in this time of gloom and doom seeming all around, this is most certainly one bright news.