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Published on: June 28, 2020, 10:47 p.m.
In troubled waters
  • A tranditional fisherman casts his net wide for a catch

By Hemang Palan

Aquaculture and ocean-fishing activities have traditionally catered to domestic as well as overseas seafood consumers of low-end and high-value products, sourced and processed in various states of India for the past many decades.

During the lockdown, ocean-fishing was not allowed to a large extent in India. As the country eases lockdown in a phased manner, the onset of monsoon has almost stalled the fishing activities.

Indian seafood exports, at 6 per cent global share, are pegged at around $7 billion annually. China, the largest exporter of seafood, accounts for around 63 per cent market share worldwide. The balance is divided amongst 190 countries.

The anticipated effect of the pandemic on the spending capacity of billions of seafood consumers of high-value products worldwide is a major concern for the Indian seafood industry – comprising marine products exporters, seafood processors, aquaculturists and fishermen.

Due to the lingering fear of a probable second wave of the pandemic, cafes, hotels, restaurants and pubs in leading seafood importing markets like the US, Europe and Japan are not likely to be fully operational in the months to come. The cruise industry which has taken a massive hit due to pandemic is unlikely to see a surge in passenger traffic either.

The ongoing Sino-Indian stand-off does not augur well for Indian exporters as China is also a major buyer of high-value Indian seafood products. All these factors are likely to dampen the exports of high-value Indian seafood products, some of which cost as high as $40 per kg. Generating direct and indirect employment for over 1.2 million families in India, farmed shrimp production touched seven lakh tonnes in 2019. Of which, 87 per cent was exported to the US, China, Japan, the EU, and Southeast Asia earning a robust foreign exchange to the tune of Rs35,000 crore.

Sumedh Sawant, an aquaculture consultant, said, “Post lockdown, the prices of high-value seafood products like shrimps and pomfrets have fallen by around 25 per cent due to weak demand in the domestic and foreign markets. I anticipate at least 20-30 per cent decrease in global demand for expensive seafood products in the months to come. As most economies across the globe are likely to face economic stress, the world-wide consumption of seafood products will be largely hit.”

Thus, aquaculture and ocean-fishing activities across the country, especially in the states of Andhra Pradesh and Gujarat are likely to face a major slowdown this year. Gujarat exports high-value fish, pomfret; and Andhra Pradesh is the fourth largest shrimp producer in the world.

“In order to protect their margins, Indian seafood exporters are likely to reduce the sourcing of high-value fishes and shrimps from fishermen and aquaculturists. Or, exporters will buy these expensive seafood ranges from fishermen at bargain prices. It is eventually going to affect the income of Indian fishermen community,” added Sawant. “High-value sea food products like shrimps and pomfret account for almost 70 per cent of India’s seafood exports. A dip in global demand for these expensive ranges certainly does not augur well for Indian seafood exporters,” said Sawant.

Deepak Gadre, promoter of Gadre Marine Exports, an exporter of seafood, said, “I foresee a dip of around 20 per cent in the export prices of high-value Indian seafood products in the near future, although volumes may not go down drastically this year. The profit margins of Indian seafood exporters might deplete in the current financial year.”

He adds that around 80 million fishermen and their associates in India should be properly trained in observing fishing-net discipline while fishing at sea to enhance the quality of catchments. “In such an unprecedented business scenario, skilling Indian fishermen on the proper and scientific methodology of fishing activities will certainly boost the country’s seafood exports of high-value products. Also, the government of India should incentivise aquaculture farming by offering huge tax benefits,” said Gadre.

Incidentally, the recently announced Pradhan Mantri Matsya Sampada Yojana by the government of India is aimed at augmenting fish productivity in the country at a sustained average annual growth rate of 9 per cent.
 
Labour crisis

The migrant crisis too has hit the operations of Indian seafood export units, especially those in Gujarat which exports seafood products worth around Rs5,000 crore annually. Nipun Motivaras, director of Veraval-based Shyam Marine Foods, a leading exporter of ‘Ribbonfish,’ said that around 3,000 trained migrants employed by various seafood export units in the coastal belt of Gujarat’s Saurashtra region have gone back to their home states of Tamil Nadu, Maharashtra, and Andhra Pradesh in the past few months.

“We don’t know when they’ll come back. Their absence has disrupted seafood processing, resulting in operational issues for exporters in a stressed economic scenario,” he added.

It is estimated that seafood processing units in India are unlikely to operate at full capacity and few of them may close down in this financial year. Also, a recent survey by the Government of India’s The Central Institute of Brackishwater Aquaculture indicates that lockdown in India and subsequent restrictions adversely impacted the production of high-value seafood like shrimps and allied activities in the country.

The Institute’s survey estimates that the shrimp aquaculture sector would probably incur a loss of about R10,000 crore in the current financial year, leading to a huge dip in volumes of high-value seafood exports from India.

Ravishankar C.N., director, ICAR-Central Institute of Fisheries Technology, said that the fishermen community in India suffered huge financial losses during the lockdown period. “Those fishermen who ventured out into the sea just before the lockdown in March, while returning back had to throw out or destroy the entire catch as there was complete closure of harbours and marketing services.” He added that since credit in the fisheries sector is dominated by the informal sector, the prevailing situation has led to credit repayment challenges for many, including seafood exporters.

“There are alarming reports emanating from various corners of India regarding the sale of fish laced with chemicals like formaldehyde, primarily aimed at increasing the shelf life of the stock. Unfortunately, such a practice has the potential to adversely affect the health of consumers. It will harm fisheries’ economy and seafood exports in the long term. The department concerned has to issue advisories, and regulatory and enforcement authorities need to be vigil on this. The surveillance is to be stepped up to boost our seafood exports,” added Ravishankar.

He said that the Chinese city of Wuhan, the epicenter of the pandemic, has been an importer of live seafood items from India for the past many years. However, seafood exports to the US have reduced to less than half recently and many countries have stalled their imports.

Moreover, Indian seafood exporters are worried about the EU-Vietnam Free Trade Agreement, which gives Vietnam an export advantage on marine food products vis-à-vis India in accessing the lucrative markets in the European Union. Under this agreement, Vietnam gets benefited from tariff relaxation under the staging category for selected seafood products where India has export potential.

Thus, Indian seafood products’ less competitiveness in the EU markets will continue to reflect in the earnings of Indian exporters. Exports of Indian seafood products to the EU were valued at $900 million last year. This is likely to fall drastically due to multiple reasons in the current year.

Will Indian seafood exporters sail through troubled waters in the post lockdown era? For the moment, COVID seems to have caught them in the net.

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