The local currency appreciation to its 11-month high value against the dollar has stirred concern among seafood exporters from Odisha.
This increase in rupee value, which took place after the announcement of the government election, can affect exporters’ revenues. An issue that is added to the fact that demand from the US, a primary buyer of shrimp from India, has shown a recessionary trend, the Business Standard reported.
Amid slack demand and fluctuating prices, exports are also affected by increased harvesting of this marine product in other countries like Vietnam and Ecuador, leading to a fall in the demand of Indian shrimp, which is expected to fall by about 20 per cent in value terms this fiscal.
Therefore, prices of shrimp have dropped by 25-30 per cent. While the price of shrimp of 16-20 grade has fallen from USD 16 per kilogram to about USD 12, the same for 31-40 grade shrimp has come down to USD 8.5 per kilogram from USD 11 in December-January period.
According to the estimates of Marine Products Export Development Authority (MPEDA), India’s seafood export crossed one million tonne mark for the first time with profits amounting to over USD 4.5 billion in 2013-2014 (1 April 2013-31 March 2014).
This record performance was due to two major factors — fall in production and exports of South Asian countries and the lowering of countervailing duty on Indian shrimp in US.
“From the beginning of this fiscal, exporters are hit hard due to the sudden appreciation of rupee and rising input costs for farmers, particularly towards seeds and feeds,” pointed out Gorachand Mohanty, president of the Seafood Exporters Association of India (SEAI)-Odisha region.
Sector sources reported that the above mentioned changes in the currency exchange rate have forced many importers to cancel their orders or renegotiate the prices.
Fishing industry looks for bailout package
With the seafood industry finding itself in troubled waters due to a variety of reasons, the exporters and trawler operators are baying for a bailout package from the new government at the Centre.
Achieving the export target of $15 billion by 2015 turning into a Herculean task, the industry is looking at a booster dose with a slew of incentives. The most important among them is to dispense with Letters of Permission (LoP) being given to some foreign vessels registered in the name of Indian firms.
“To put an end to overexploitation of fish resources, we are sensitising the industry on sustainable technologies. Even the LoP system may soon become a closed chapter,” Y.S. Yadava, Director of Bay of Bengal Programme (an inter-governmental organisation) and former Central Fisheries Commissioner, has told The Hindu.
Sources say the export market is under-explored even though there is a heavy demand for sushi grade tuna, shrimp, lobsters and other varieties to the United States, Japan and the European Union countries, known for their penchant for seafood. India contributes less than 1 per cent of ornamental fish exports – an area which is yet to be tapped fully.
“We have 8,129-long coastline with two million square km of Exclusive Economic Zone and 1.2 million hectares of brackish water body. A series of incentives with thrust on augmenting infrastructure will boost our turnover from inland and marine fisheries,” says Y.G.K. Murti, president of Federation of Indian Fishery Industries (FIFI).
Oozing out confidence that with local MP K. Haribabu familiar with the problems of the industry and change of guard at the Centre and in the State, he says they will get their voice heard at the State and the Centre for formulating a policy to encourage the fisheries sector in a big way.