“We might see a further drop of 10 % in exports from the performance of FY21”

By: |
May 10, 2021 2:15 AM

The seafood exports have dropped 20% in both volume and value terms in the last fiscal. The impact is more in the sea-caught sector.

Jagdish Fofandi, national president of the Seafood Exporters Association of India (SEAI)Jagdish Fofandi, national president of the Seafood Exporters Association of India (SEAI)

India is the largest producer of farmed-shrimps in the world and one of the highest suppliers to the global market. Last fiscal, India exported 12,89,651 tonnes of seafood worth $6.68 billion. Jagdish Fofandi, national president of the Seafood Exporters Association of India (SEAI), speaks to FE’s Rajesh Ravi about the impact of the Covid-19 pandemic on the seafood sector, and its outlook. Edited excerpts:

How was the export performance last fiscal?
The seafood exports have dropped 20% in both volume and value terms in the last fiscal. The impact is more in the sea-caught sector. Exporting to the Chinese market is very difficult now due to various issues and China has a 25% share in the total exports. The US market is stable but the EU market is sluggish due to the pandemic. The loss from the China market cannot be compensated from other markets. Unit prices of the exported items have also declined marginally.

What is the outlook for the next fiscal with some coastal states imposing lockdown?
In a lockdown, movement is tough even with some concessions for the seafood sector. It looks like that we might see a further drop of 10% in the exports from the performance of FY21. Seeding in farms is on the lower side according to reports from several states. The seafood sector had a sure plan of `1,00,000 crore exports by 2025, but things look bleak and very distant now.

The sea-caught sector is seen sluggish in the recent past. What is your outlook?
We need a concrete conservation policy with all the coastal states coming together. Four years back, we reached an optimal fishing level and it has been declining continuously. The capacity utilisation of processing plants and ancillaries have dropped 10-15%. More than 50% of the workforce in the seafood industry is employed in the sea-caught sector. The share of sea-caught in the total exports is declining and now constitute only 30-35%. The economy of the coastal sector which employs lakhs will be affected.

What is happening to the aquaculture sector which was seen growing robustly before the pandemic?
In the prevailing conditions, our focus for the next year is to maintain the output and not look at growth. The aquaculture sector, which mainly comprises shrimp aquaculture, grew from 70,000 tonnes in 2008-09 to 8,00,000 tonnes in 2018-19 and is now beset with serious problems of disease and mismanagement. It had the potential to double by 2025.

What about issues with China and the non-tariff barriers?
China has started more stringent checking with the second wave of Covid-19 and this, in turn, leads to delayed clearance and payment. Unreasonable delay in payment, transhipment and vessel waiting for charges by the shipping lines are adding to the uncertainty. Issues are also there with white spot disease syndrome and Covid presence in packing materials. The entire west coast depends on exports to China and is suffering.

There are also reports of container shortage?
Container shortages are still a big problem and it’s a global issue. Another big issue is that freight charges have increased. For refer containers to the US, charges have increased from $3500 in March 2020 to $6500 at present. Maersk has now announced that from May 2021 it will be $12,500. Other operators will follow. No industry can survive with these kinds of cost increase.

What about support from the Government for the sector?
Sickness is brewing in the sector with many small exporters on the verge of being classified as NPAs. So far there has been no direct support to the exports sector. Markets are stable, but we are apprehensive about the incentives and policies. Merchandise Export from India Scheme (MEIS) was withdrawn without an alternate scheme. Interest subvention is limited to MSME and big exporters don’t get the benefit. We are in a buyers’ market and cannot survive without Government support.

Do you know What is India expected to grow 10 pc during current fiscal: NCAER Director General Poonam Gupt,FinMin releases Rs 9,871 cr grant to 17 state, Cash Reserve Ratio (CRR), Finance Bill, Fiscal Policy in India? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Goldman Sachs cuts US GDP growth forecast for 2022 over Omicron fears
2Pakistan receives USD 3 billion from Saudi Arabia to help stabilise country’s economy: Official
3Lot of unhealthy speculation on crypto taking place, says FM Sitharaman