India is the biggest producer of farmed-shrimps in the world and one of the highest suppliers to the international marketplace. 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 influence of the Covid-19 pandemic on the seafood sector, and its outlook. Edited excerpts:
How was the export efficiency last fiscal?
The seafood exports have dropped 20% in each volume and worth terms in the last fiscal. The influence is more in the sea-caught sector. Exporting to the Chinese marketplace is pretty tough now due to different problems and China has a 25% share in the total exports. The US marketplace is steady but the EU marketplace is sluggish due to the pandemic. The loss from the China marketplace can not be compensated from other markets. Unit costs of the exported products have also declined marginally.
What is the outlook for the next fiscal with some coastal states imposing lockdown?
In a lockdown, movement is challenging even with some concessions for the seafood sector. It appears like that we may well see a additional drop of 10% in the exports from the efficiency of FY21. Seeding in farms is on the reduced side according to reports from numerous states. The seafood sector had a sure program of `1,00,000 crore exports by 2025, but items look bleak and pretty distant now.
The sea-caught sector is seen sluggish in the current previous. What is your outlook?
We will need a concrete conservation policy with all the coastal states coming with each other. Four years back, we reached an optimal fishing level and it has been declining constantly. The capacity utilisation of processing plants and ancillaries have dropped 10-15%. More than 50% of the workforce in the seafood business 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 impacted.
What is taking place to the aquaculture sector which was seen expanding robustly just before the pandemic?
In the prevailing situations, our concentrate for the next year is to retain the output and not look at development. The aquaculture sector, which mostly comprises shrimp aquaculture, grew from 70,000 tonnes in 2008-09 to 8,00,000 tonnes in 2018-19 and is now beset with really serious complications of illness and mismanagement. It had the possible to double by 2025.
What about problems with China and the non-tariff barriers?
China has began 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 illness syndrome and Covid presence in packing components. The whole west coast depends on exports to China and is suffering.
There are also reports of container shortage?
Container shortages are nevertheless a large dilemma and it is a international challenge. Another large challenge is that freight charges have improved. For refer containers to the US, charges have improved 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 adhere to. No business can survive with these types of expense improve.
What about help from the Government for the sector?
Sickness is brewing in the sector with several compact exporters on the verge of becoming classified as NPAs. So far there has been no direct help to the exports sector. Markets are steady, but we are apprehensive about the incentives and policies. Merchandise Export from India Scheme (MEIS) was withdrawn devoid of an alternate scheme. Interest subvention is restricted to MSME and large exporters do not get the advantage. We are in a buyers’ marketplace and can not survive devoid of Government help.