India: Rupee gain worries seafood exporters

The seafood exporters from the state are worried over strengthening of rupee against dollar fearing drop in volume of their shipment, which has become costlier for the buyers.

“Exporters are worried over fast strengthening of rupee against the dollar. It has gained by about five per cent in last three to four days,” said Gorachand Mohanty, president, TheSeafood Exporters Association of India , Odisha region. It may have a cascading effect on the exports in 2014-15, he added.

Exporters said, marine products exports may touch about $4 billion in the 2013-14. The rupee reversed last year’s losses of more than 11 per cent and hit an eight-month high of Rs 59.57 to against the US dollar on Wednesday.

“Prices of sea foods have fallen due to declining demand from the United States. Better production prospective in Thailand has added to the woes,” Mohanty said.

The cold wave in the United States has led to decline in demand for the aquaculture shrimps as importers were unable to sell their products in the wake of declining demand from the consuming units.

This has led to piling of the inventory in the destination country.

The temperature had plunged to even -52 degree Celsius in January as the bone-chilling weather gripped the United States, a key market for the Indian shrimp industry. USA is the third largest buyer of Indian marine products, after South East Asia and European Union, with a share of 21.29 per cent in terms of value realisation as per MPEDA figures in 2012-13.

The prices of aquaculture shrimps of 16-20 grade has fallen from $18 per kilogram to about $15 and prices of 31-40 grade has come down to $10 per kilogram by March end from $13 in January, exporters said.

Strengthening of rupee will definitely have impact on the exports. This may bring down the volume of exports and foreign exchange realisation from the sale, said Prava Ranjan Patnaik, managing director, Falcon Marine exports limited, a leading exporter of the country.

Exports of all goods will be affected including the seafood sector with rupee gaining against the dollar, said Ramesh Mohapatra, president, Utkal Chamber of Commerce and Industry (UCCI) and a leading sea-food exporter.

2013-14 fiscal year's seafood earnings exceed USD 4.5 billion

Seafood exports from India recorded USD 1 billion increase during the financial year 2013-14, according to provisional estimates of the Marine Products Export Development Authority (MPEDA).

This rise in exports, which for the first time exceeded 1 million tonne, represents a 30 per cent increase from the previous year, when exports had been made for USD 3.5 billion, the Business Standard reported.

This promising performance was due to a serious fall in shrimp production and export from South East Asian countries and the lowering of countervailing duty on Indian shrimp in US.

In addition, production in South East Asian countries had been affected badly due to the spread of early mortality syndrome (EMS). Particularly, supply from Thailand, the world's second largest shrimp producer, dropped around 50 per cent from their normal production size of 500,000 tonne per year. Likewise, other leading producers like Vietnam and Malaysia have been hit badly.

This was added to the fact that processing plants in East Asian countries like Vietnam, China and Thailand, had to depend on imports from India to meet their commitments with European and US importers.

Besides, an increase in the production of vannamei shrimp, a rise in the productivity of black tiger variety of shrimp and a rise in chilled item exports also helped to achieve higher exports.

MPEDA informed the US, which is the largest market for Indian shrimp in dollar terms, had a 51.24 per cent participation in the total Indian shrimp exports. This was followed by exports of 16.10 per cent to South East Asian countries, 15.82 per cent to EU and 4.94 per cent to Japan.

MPEDA data revealed that the contribution of cultured shrimp to the total shrimp export is 77.68 per cent. Export of cultured shrimp showed a growth of 32.55 per cent in quantity. vannamei shrimp also showed tremendous growth to 134,372 tonnes from 69,565 tonnes, amounting to USD 1,473 million from USD 540.7 million compared to 2012-13.

However, according to the Seafood Exporters Association of India (SEAI), seafood exporters are worried over strengthening of rupee against dollar and consider there may be a drop in their shipment volume, which has become dearer for foreign buyers.