Seafood exports witness sharp fall; traders want govt to step in

Seafood exports witness sharp fall; traders want govt to step in

Kochi: Seafood exports from India have fallen drastically in the first seven months of 2007-08, largely on account of declining catches across the country, but the earnings of exporters have been protected to an extent by higher prices. There has been more than 20% decline in quantity, while the fall, in rupee terms, is lower at around 14%.

Exporters attribute the decline to low catches leading to non-availability of stock in the processing units across the country. India exported a total of 2,65,889 tonnes of seafood, worth Rs4,281.87 crore, between April and October. In the comparable period last year, it exported 3,33,834 tonnes of seafood worth Rs4, 990.33 crore, according to figures provided by the government trade promotion body, Marine Products Export Development Authority (MPEDA). In dollar terms, the earnings dropped to $1,089.5 million (Rs4304 crore) from $1,091.29 million.

Despite the appreciation of the rupee against dollar, there has not been a very sharp decline in export earnings in rupee term as, on an average, prices increased 21%, from $3.27 to $3.96 per kg.

The local currency has appreciated by around 13% against the greenback since the beginning of the financial year.

While the fall in exports has been marginal in the case of shrimp which accounts for nearly 32% of seafood exports by volume, it has been significant in the case of frozen fish (33.36% of exports), cuttle fish (10%), and squid (7%).

According to MPEDA, heavy rains in some parts of the country have led to lower salinity in the water which has affected the population of fish.

Despite higher prices, A.J. Tharakan, national president of Seafood Exporters Association of India (SEAI), says, the appreciation of the local currency is a major cause for concern. Since India has to remain competitive in the export market, it will have to source fish for processing from aqua-farmers and fishermen at lower prices. “There is a limit to this since we cannot pass on the entire burden to the fishermen. Hence, exports figures are going down," he says.

According to him, countries such as Bangladesh, Vietnam and Pakistan have several fish varieties other than shrimp and this has given them an advantage over India. He also cites the specific case of India’s much-valued black tiger shrimp, which costs around Rs170-180 a kg. This cannot compete in the export market as the white shrimp variety, vannamei, is produced in Thailand, Vietnam and Indonesia at around Rs80-90 a kg.

The government is yet to implement its plan of waiving service tax on outsourced activities in the marine export industry. This is adding to the woes of the marine sector. “In this sector, there is a lot of outsourcing such as peeling and processing of shrimps. Roughly, Rs15 goes as payment for outsourcing on every 1kg of shrimp and this attracts a service tax of 12.5%," adds Tharakan.

Traders say that processing units are also buying lower quantities of fish for export. They want the government to step in to support exporters with more concessions to overcome the rupee’s appreciation, create cold chain infrastructure across India, and take steps to boost domestic consumption.