Frozen shrimp. (Photo: Stock File)
Shrimp exports predicted to hit USD 7 billion by 2022
Thursday, December 14, 2017, 21:30 (GMT + 9)
Shrimp exports from India have been forecast to nearly double to USD 7 billion by 2022, driven by strong demand, high quality, improved product mix, and an increase in aquaculture area in Andhra Pradesh, Gujarat, Odisha and West Bengal.
Ratings agency CRISIL has made this prediction even as Indian’s Asian rivals battle structural issues and rising domestic consumption, Economic Times reported.
In fiscal 2016, India became the biggest shrimp exporter, pipping Vietnam by just USD 100 million.
A year on, the country has decisively pulled ahead, racking up USD 3.8 billion exports even as Vietnam flatlined at about USD 3 billion.
Since 2010, shrimp production in Asia has been severely affected by diseases, floods, labour issues, and tightening environmental norms. Production in Vietnam has declined by 40 per cent from peak levels because of shortage of freshwater, salinity intrusion and illegal shrimp farming.
Thailand, which was once the top exporter, is now ranked 5th after a 65 per cent plunge in production from peak levels.
And in 2016, China's shrimp production nosedived by 60 per cent even as its consumption more than doubled, rendering it a marginal exporter.
In addition, these countries also faced significant quality challenges. On the other hand, Indian exporters have in the past few years emphasised on lower-density shrimp farms to control diseases, while maintaining quality across the value chain.
What also helped was the use of resilient specific pathogen free (SPF) brood-stock imported from the United States. Consequently, between fiscal 2012 and 2017, India's shrimp production doubled, and helped it grab the opportunity created by lower supplies from Asia.
CRISIL rates 75 shrimp exporters, whose revenues grew at a compound annual growth rate of 9 per cent between fiscals 2015 and 2017 to over USD 2.2 billion, and contributed to 60 per cent of India's shrimp exports. Their gearing, or debt to equity ratio, has improved to under 1 time from over 1.3 times, and strengthened their credit profiles.
Meanwhile, China is struggling with both structural issues and surging domestic demand. Consequently, India's primacy in shrimp exports is unlikely to be seriously challenged over the medium term.
“Strong volume growth and higher proportion of value-added products will bolster the operating profitability of CRISIL-rated shrimp exporters,” stressed Rahul Guha, Director, CRISIL Ratings.
In his opinion, healthy accretions and the absence of major debt-funded capital expenditure will reduce leverage and further strengthen their credit profiles.
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