Seafood exporters at sea, thanks to global crisis

One of the immediate casualties of the global economic crisis is the marine products’ export sector. The seafood exporters presently find themselves caught in a deep crisis, thanks to the on-going global economic turmoil. A bunch of factors, including low offtake by major importing nations, the increase in freight rates and a steep rise in input cost like electricity, packaging and ice have added to the woes of exporters in the recent months.

Exporters told Business Standard the drastic fall in the volume of exports during the last couple of months and cancellation of orders have nearly dashed hopes of the industry. The freight rates have gone up 20-30 per cent or even higher in dollar terms to almost all destinations from India. Major importing destinations like the USA, EU and Japan have started re-negotiating the rates of major importing items like frozen shrimp, frozen fish and squid.

 

Meanwhile, the exports of marine products recorded a marginal growth of 1.9 per cent during the first quarter of 2008-09 at 102,767 tonne, valued at Rs 1,542.72 crore. It rose 2.45 per cent in rupee value while in dollar terms the rise was 5.26 per cent, at $380.11 million. India’s seafood exports had touched an all-time high of 612,641 tonne valued at Rs 8,363.53 crore in 2006-07. But, the next year saw a 11.58 per cent drop in volumes and 8.88 per cent drop in value terms, at 541,701 tonne and Rs 7,620.92 crore respectively.

According to leading exporters, the drop in exports would be more severe this year owing to a host of reasons. They feel that the marginal growth in Q1 has helped matters. From August, the overseas markets have turned out to be very tough. “This may be the toughest period the seafood industry has seen over the last two decades as there are limited positive factors like dollar appreciation before the industry,” said a city bound exporter.

Except Japan, all major markets for Indian seafoods had reduced their share during April - June period. Japan’s share rose to 22 per cent from 16 per cent while the share of USA dropped to 10 per cent from 13 per cent, EU dropped to 34 per cent from 35 per cent and China’s share fell to 11 per cent from 13 per cent.

Although frozen shrimp continued to be the major export item from India, its share in the total export basket dropped to 42 per cent from 52 per cent last fiscal. A marked increase was seen in the case of frozen squid in percentage terms. On the other hand, the share of frozen fish fell to 14 per cent from 17 per cent, and cuttle fish to 6 per cent from 10 per cent.

Interestingly, Kochi had lost its top spot in export of marine products as Pipavav grabbed the first rank with an export of $69 million followed by JNPT with $68 million.

According to sources in the industry, the current fiscal would be a “doom period” for sea food as crisis-ridden world market is seriously affecting the business.