The Central government's recent announcement of production-linked incentive schemes for the food processing sector, which includes value-added shrimps, should improve India's share of exports this year, it opined.
Shrimp exports are expected to grow by 20 per cent to about USD 4.3 billion in 2021, driven by a revival in demand and restoration of supply chains that were disrupted last year by the COVID-19 pandemic, according to a report.
It should help India wrest global leadership in shrimp exports after slipping to the second spot in 2020, rating agency Crisil said in the report.
“India’s shrimp exports contracted 23 per cent in calendar 2020 due to subdued demand in key export markets because of lockdowns and disruptions in brood-stock supplies from the US, which impacted the domestic shrimp harvest cycle,” Crisil Ratings Director Rahul Guha said.
The good part is, the second wave of the pandemic has not led to stringent curbs on the movement of raw materials and stock, so it won’t be as disruptive as the first wave, he noted.
“Therefore, we expect exporters to manage their operations well and grow an average of 20 per cent this year,” he added.
In 2020, lockdowns and supply-chain disruptions led exports to decline to USD 3.6 billion from USD 4.7 billion in 2019.
Ecuador edged past India with USD 3.7 billion exports because it had fewer logistical chaos and focused on catering to the voracious appetite in China for raw shrimps.
India, Ecuador and Vietnam account for 55 per cent of the global shrimp sales.
India rose to prominence as a shrimp exporter in the past decade, owing to a sharp focus on quality and disease control and by shifting to the more resilient, specific pathogen-free brood-stock from the US.
Producers in Andhra Pradesh, Tamil Nadu, Odisha and West Bengal also benefited from aquaculture zones built by state governments and subsidies offered for electricity and capital, the report noted.
The Central government’s recent announcement of production-linked incentive schemes for the food processing sector, which includes value-added shrimps, should improve India’s share of exports this year, it opined.
A likely on-year increase in realisations by 10-12 per cent would also lend an upside to the operating margins of exporters by 150 basis points to 9 per cent this fiscal, the report stated.
The retaliatory tariff proposed by the US on select shrimp products is likely to have minimal impact, which is estimated at just USD 6.3 million, on the industry’s growth.
But, if the supply-chain disruption in key shrimp-producing states extends into the second quarter of this fiscal, it could curtail growth, the report added.