Andhra Pradesh in the province exporting shrimp offering the best performance in 2018 with over 30pct participation in exports.

Shrimp exporters face prons and cons this year

INDIA
Friday, November 23, 2018, 02:20 (GMT + 9)

Indian shrimp exports is likely to have mixed results this year as demand declines in the European Union and exports to the United States continue to grow.

This is the forecast presented in a report by US-based fintech company Drip Capital. 

Drip offers a unique trade financing product targeted towards SMEs in developing markets. (Photo: Drip)

This report outlines that on the one hand, increased competition and decreased EU demand seem to be depressing sales but on the other hand, analysts expect Indian shrimp exports to the US to grow by 15-20 per cent this year, Press Trust of India reported.

The analysis states that since many exporters are not currently hedged against currency fluctuation, rupee depreciation has allowed exporters to keep losses to a minimum.

"Depreciation of the Indian rupee against the dollar will likely support Indian exporters against those from other markets. As per industry analysts and trade sources, this could boost shrimp exports to the US this year, a spokesperson for the company stresses.

Photo: U.S.National Fisheries Institute

Drip Capital representative also highlights that however, the entry of competing export countries in the global shrimp trade is also a factor to take into account. The resulting abundance of supply could cause a glut in the market, making the future of Indian shrimp trade difficult to predict for us at this juncture.

Photo: U.S.National Fisheries Institute

Competition from China, Ecuador, Thailand and Vietnam is at an all-time high affecting exports to EU from India.

The report also points out that the combination of a falling rupee, strong demand for raw materials and a reduction in raw shrimp production has encouraged farmers to increase prices, particularly in the four largest shrimp producing states, Andhra Pradesh, Tamil Nadu, Maharashtra, and Kerala.

Photo: exportgenius.in

Continuing up the supply chain, Andhra Pradesh has been the top performing shrimp exporter among the states for the financial year 2018, consistently contributing over 30 per cent of the country's shrimp exports over the last four quarters.

The state government provides subsidies for factory as well as machinery, which has helped Andhra Pradesh to dominate shrimp exports market. 

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