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Seafood industry finds rupee tide hard to beat

Seafood industry finds rupee tide hard to beat
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First Published: Sun, Feb 10 2008. 11 48 PM IST
Updated: Sun, Feb 10 2008. 11 48 PM IST
Kochi: Yoshio Kojima, chief executive officer of Japanese hotel chain Maruha Restaurant Systems Co. Ltd, is in Kochi for sourcing live Indian crabs. He was joined by Tetsuji Totsune, president of Tokyo-headquartered Maple Foods Ltd, which is into supplying ready-to-eat and ready-to-cook food.
They were among the 60-odd foreign delegates at the just-concluded India International Seafood Show, organized jointly by the government trade promotion body Marine Products Export Development Authority (MPEDA) and the Seafood Exporters Association of India (SEAI).
The show was held in the backdrop of falling exports, which for the first nine months of 2007-08 is down to 393,000 tonnes (worth Rs5,701 crore), compared with 486,000 tonnes (Rs6,659 crore) during the corresponding period last year.
According to G. Mohankumar, chairman of MPEDA, this is the worst period for the marine industry in India.
“The rising rupee is hitting the exporters hard. Farmers do not seem to be interested in taking up aquaculture next season,” he says.
The local currency has risen by 12% against the dollar in the last one year and this has brought down the income of exporters in rupee terms.
But the foreign delegates are still scouting for marine products from here and they appear to have struck some deals though exporters aren’t willing to talk about them yet.
Kojima, for one, has been in talks with a number of seafood exporters at the fair and appears to have found a few firms that have agreed to supply crabs for his hotel chain.
Tetsuji, who has been the main supplier of food products such as frozen parathas and ready-to-cook-and-serve seafood dishes to the hotel chain, says the seafood show is a platform for him to meet several producers and suppliers and that he plans to import more seafood products from India.
Derek Louden, who won the “Friends of India” award at the seafood show for leading in the import of India’s black tiger shrimp, has been sourcing shrimp from India for the last 25 years. He is the director of $100 million Scotch Frost of Glasgow Ltd, a leading supplier of food materials to end-users and hotel chains across Europe. He imported some 100 containers of shrimp worth $10 million India in calendar year 2006.
Jaisingh Joseph, director of Kochi-based Universal Marketing Services that supplies shrimp to the UK firm, says during 2007, the shipments will have been around 70 containers worth around $6.5 million. The material is sourced from a few processing firms in Andhra Pradesh and West Bengal. The appreciation of the rupee, coupled with a drop in shrimp production, is attributed to the fall in shipments.
Despite these odds, some firms are doing good business. For instance, Surya Rao, managing director of Suryamitra Exim Pvt. Ltd, a company based in Bhimavaram in Andhra Pradesh, says his firm, which exported seafood worth Rs43 crore during 2006-07, will end this fiscal year with around the same figure, though the situation would have been better had the rupee not appreciated.
He says the company has a whole range of value-added items such as easy peel shrimp, fish fillets, breaded items, cut crabs, etc which has left it to some extent insulated from the vagaries of the market. It recently got orders from South Africa for easy peel shrimp and hopes to find new markets.
Giving credence to the demand of the seafood industry that it should be allowed to introduce the exotic white shrimp variety, vannamei, found in South America, comes Louden’s revelation of the consumer demand in Europe slowly shifting to vannamei, which is cheaper. This variety grown in the farms in Vietnam, China and Thailand will also impact India, he fears.
A.J. Tharakan, vice-chairman of MPEDA and former president of SEAI, says the industry has been demanding the government to allow the introduction of vannamei.
There are chances that the agriculture ministry may allow its introduction, Tharakan says. The cost of production of vannamei is around Rs80-90 per kg compared with Rs180-190 for black tiger.
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First Published: Sun, Feb 10 2008. 11 48 PM IST
More Topics: Seafood | MPEDA | Rupee | Money Matters | Commodities |