Seafood exporters hit hard with rupee rising against dollar

Exporters, who send out $4.7-bn of seafood annually, are reportedly facing losses on each shipment

The hardening of the rupee against the dollar has badly hit the seafood exporters in the country as the exports are now fetching lesser realisations than before.

At the present exchange rate, Indian exporters, who send out $4.7-billion worth of seafood annually, are reportedly incurring losses on each consignment they ship. Since the beginning of 2017, the domestic currency has appreciated more than five per cent against the dollar.

“The net realisation has come down. It will proportionately impact the raw material prices. We are incurring losses,” said Tara Patnaik, chairman of Falcon Marine Exports Ltd, India’s largest exporter of seafood.

However, the off season has come as a respite for the exporters. “Now, it is off-season. We expect the raw material prices to go down which may absorb the losses,” he said.

The loss out of existing orders will be absorbed only when the raw material prices plunge. Exporters are pinning hopes on the arrival of new crops around the mid-May to ease the prices. Normally, June to October is the peak period for exports of seafood products from India. Frozen shrimp is the major item of export in terms of quantity and value, accounting for 39.53 per cent in quantity and 66.06 per cent of the total dollar earnings.

US, with a share of more than 28 per cent , is the largest market destination of Indian marine products in dollar terms followed by South East Asia, Japan, among others.

"The appreciating rupee has added to the woes when the key importing countries like European Union (EU) and US are adopting non-tariff barriers like increased inspections, undue detentions to discourage imports into their countries," said an exporter.

Last year, the EU had enhanced its norm for testing samples from at least 10 per cent of the consignments earlier to 50 per cent. Then testing norms were revised by the EU in the aftermath of results of analytical tests undertaken by official control laboratories. The tests had demonstrated that the level of compliance of aquaculture products from India with regard to presence of residues of chloramphenicol, tetracycline, oxy-tetracycline, chlortetracycline and metabolites of nitrofurans were unsatisfactory.

The Donald Trump government's inward looking policies to create jobs in the US and to give level playing field to their domestic industries is also taking a toll on the Indian exports, the exporter added.

The rupee closed at 64.2750 a dollar at fresh 20-month high, up 0.25 per cent from its Monday's close of 64.44.