Aided by strong order books, exports of shrimps are likely to grow by about 30 per cent this financial year from 0.43 million tonnes exported in FY17. The exports are likely to surpass 0.55 million tonnes in FY18.
“Following 19 per cent volume growth registered during FY17, the trend continued in the first half of FY18 with volumes growing 33.6 per cent year-on-year (y-o-y). India currently accounts for 35 per cent of the global frozen shrimp exports,” said rating agency Icra in a report.
Icra expects shrimp exports during FY18 to grow 25-30 per cent, led by order visibility for Indian exporters and continued demand from main importers such as the US, said Pavethra Ponniah, vice-president and sector head (corporate sector ratings) of Icra.
During FY17, frozen shrimp exports from India grew 25 per cent y-o-y to Rs 24,370 crore (in FY17) from Rs 19,492 crore (in FY16), helped by 19 per cent y-o-y volume growth and balance from growth in realisation.
The growth in demand of Indian frozen shrimp is expected to continue, despite the negative sentiments regarding the imposition of a ban on Indian shrimps.
“This is expected to support exports growth to the US. Weak production dynamics in Vietnam, coupled with increasing demand in Japan and the European Union (EU) — top two export destination for Vietnam), is expected to push up growth.
“Lower domestic production in China during 2017 owing to the persistent disease issues, too, is expected to drive growth in shrimp exports to China. Exports growth to the EU will be determined by the outcome of the audit conducted by the EU officials on November 30, 2017,” the report said.
The audit was conducted on select production facilities in Tamil Nadu and Odisha for the use of antibiotics in shrimps.
On the recent bans on shrimp imports by Thailand and Kuwait, the report said, the ban will have a negligible impact on the Indian frozen shrimp industry, as they constitute only 0.3 per cent (Rs 43.5 crore in first half of FY18) of the total frozen shrimp exports from India.
“Also, majority of the Indian exports to Thailand are for further re-processing and are in the medium count range (31-40 counts). But closely following the Kuwait ban, the Thailand suspension could impact public perception of the quality of Indian shrimps; this needs to be watched,” Ponniah said.