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Weak Yen, overstocking shrink shrimp size and exports, pulling down demand, prices |
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KOCHI: Major buyers of Indian seafood are increasingly going for smaller size shrimps due to a combination of factors like recession, weakening currency and overstocking which have triggered a demand slump pulling down the prices.
In a sluggish market, the buyers prefer to cut down their purchases by ordering shrimps of smaller sizes that command lesser price. This, in turn, may affect the profitability of the seafood exporters in the current fiscal. India exports over Rs 30,000-crore worth seafood a year. Frozen shrimps, mostly from farms, account for nearly 70% of this value.
"Globally the buyers are going for smaller sizes which cost less. This seems to be the new trend across the US, Europe and Japan. While Europe is yet to come out fully from recession, increased health awareness is forcing the US consumers to buy smaller size shrimps," said Kamlesh Gupta, founder chairman of WestCoast Fine Foods, an exporter who also operates aquaculture farms. According to Globefish, a unit of FAO fisheries and aquaculture department that reports on international fish trade, the demand has been muted in the US since January 2015 because of large unsold stocks imported in 2014.
If it was the devaluation of yen that affected the Japanese purchases, sluggish consumer demand was the principal reason for lower imports in Europe. The global production of farmed shrimp increased from 3.4 million tonne to 3.6 million tonne in 2014, with Asian producers accounting for lion's share of 3 million tonne, it said."The demand is weak from all major markets of the US and Europe.
The price of shrimps of 30 count has dropped to Rs 420 per kg , around Rs 300 less than last year," said Premachandra Bhat, managing director of Mangla Marine Exim, a major seafood exporting firm.The cost of shrimps of 40 counts is around Rs 300 per kg. The higher count bunches of 50 counts to 100 counts are cheaper. The shrimps of higher counts will bring less money for the Indian exporters.
Bhat said partial recovery of leading shrimp producer Thailand, which was devastated by a viral attack, has adversely impacted the purchases from India. "At present there is more production and less demand in the world," he said. Globefish says that overall production of shrimps will be better in 2015 than in the previous year. Weakening of Euro is likely to reduce imports to Europe in the coming months while Japanese importers are likely to be selective due to depreciation of yen. This leaves only the US market to absorb future production. It further says that Vietnam will continue to import shrimps from India for re-export to China.
Source : economictimes.indiatimes.com
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