Shrimp processing in a plant in India.
US sanction China expected to benefit exports of Indian shrimp
INDIA
Monday, January 14, 2019, 23:30 (GMT + 9)
It is expected that India will benefit from the sanction imposed by US on China, and this, together with an import increase of value-added shrimp products by US, will lead to a growth of about seven to 10 percent per annum in calendar year 2019.
India has been the largest exporter to United States of America for four years as a result of weak production dynamics in key shrimp-producing nations.
Indian shrimp exports to US saw an annual growth rate (CAGR) of 25.2 percent between the calendar year 2014 and 2017, outpacing USA’s shrimp demand CAGR growth of 7.1 percent during the same period.
The consistent performance of India in exporting shrimps to US is driven by the strong increase in demand for Indian shrimp, together with weak production dynamics in other major shrimp producing nations such as Thailand and Vietnam.
According to a statement by the rating agency ICRA, over the last four fiscals, growth in USA’s shrimp imports from India has consistently outpaced the growth in USA’s overall imports and imports from Indonesia, Thailand and Ecuador. The same is visible in the increase in India’s contribution in USA’s shrimp imports from 19 per cent in calendar year 2014 to 36 per cent in 10 months of CY2018, substituting Thailand, whose contribution declined from 11 per cent in CY2014 to seven per cent in 10 months CY 2018, and Vietnam from 13 per cent in CY2014 to eight per cent per cent in the same period.
However, the agency warns exporters that India faces stiff competition from Indonesia and Ecuador, whose export contribution during 10 months of FY 2018 has increased, supported by the increasing shrimp production.
“Going forward, Indian exporters face stiff competition from Ecuador, Indonesia and Vietnam. A strong uptick in major shrimp production since CY 2017 has intensified competition amongst leading global shrimp exporting nations,” Pavethra Ponniah, vice president and sector head - corporate sector ratings, ICRA , said.
“ICRA expects increasing shrimp production amongst the top shrimp-producing nations to cause demand-supply mismatches inducing volatile in prices,” she added.
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