THOUGH India is the world’s largest exporter of shrimps, the country continues to face problems with the European Union and even the United States, which is the largest market for Indian seafood.
The EU accounts for nearly a fifth of India’s seafood exports that added up to about $5.7 billion last year. An audit team from the EU visited the Indian farm and processing facilities a few months ago and interacted with trade delegates.
The team was unhappy over the lack of controls over primary production in India. It wanted the competent authority in India to ensure that those who supply shrimp to the continent undergo regular inspections to ensure that their products are hygienic.
What is worrying officials in the EU is the increasing use of antibiotics at shrimp farms. In the past, European officials had not only complained to Indian counterparts about the high incidence of antibiotics, but had also increased the test samples from 10 per cent to 50pc.
Last month, EU officials met at Brussels and discussed audits and reports on the Indian seafood industry. The second audit by the EU of India’s seafood industry, focusing specifically on antibiotics and microbiological residues in shrimps, is now over.
European officials continue to believe that India’s shrimp farm compliance on antibiotics is still insufficient and many exports from India continue to be rejected. Of course, this has had terrible consequences on India’s growing shrimps industry.
The International Trade Centre, a joint agency of The United Nations Conference on Trade and Development and the World Trade Organisation, noted recently that India’s exports of shrimps to the EU had grown by a mere four per cent to 555 million euros in 2017. In contrast, Vietnam’s exports soared by 43pc to 370m euros.
What is worrying officials in the EU is the increasing use of antibiotics at shrimp farms. In the past, European officials had not only complained to Indian counterparts about the high incidence of antibiotics, but had also increased the test samples from 10 per cent to 50pc
The US Food and Drug Administration (FDA) is also taking a tough stance against shrimp exporters from India. The FDA had 19 entry line refusals for shrimps because of the presence of antibiotics.
Last year, shrimp exporters from India and Vietnam accounted for 24 (12 each) of shrimp entry line refusals. The dozen refusals relating to shrimp entry lines from India related to the presence of banned antibiotics.
Besides the EU and the US, other countries are also taking a serious look at shrimp imports from India. Thailand, which accounts for 13pc of India’s $1.7bn seafood exports to Southeast Asia, has yet to decide on whether to allow imports from India.
Thailand had suspended the issuance of import licences for five categories of shrimp last year to prevent the spread of infectious myonecrosis, a viral disease of penaeid shrimp, based on the guidelines of the World Organisation for Animal Health.
Thailand had slapped a temporary ban on shrimp imports from India in December to tackle the problem. Kuwait had also imposed a ban on the import of shrimp from India.
DESPITE pressures from around the globe, India’s shrimp production continues to grow at a rapid pace. The first three quarters of 2017 saw farmed shrimp output top 500,000 tonnes, as against 400,000 tonnes in the previous three-quarter period.
According to a report by Globefish, part of the Food and Agriculture Organisation of the UN, strong demand from North America and East Asia saw India export more than 420,000 tonnes of shrimp, a hefty 33pc increase.
India’s exports to the US, China and South Korea shot up substantially during the year. But the US administration has raised the anti-dumping duty on Indian shrimp to 2.34pc from a mere 0.84pc, which could hurt India’s exports this year.
Of course, shipments from Vietnam saw a sharp spurt in anti-dumping duty – from 4.8pc last year to 25.39pc year now. The main problem relating to exports to the US relates to the presence of salmonella in the shrimps.
The FDA recently refused nearly a dozen shrimp shipments because of the presence of salmonella; 10 of these were from a single exporter in Odisha in India, and the remaining two from Maharashtra.
According to Southern Shrimp Alliance, an organisation of shrimp fishermen, processors and other members of the domestic US industry, the FDA has already refused 36 entry lines of shrimp for salmonella, virtually all originating from India.
Five of the 135 seafood entry lines that were refused by the FDA contained banned antibiotics. Despite these setbacks, India’s seafood exports are expected to increase by $300 million to more than $6bn in 2017-18, according to the Marine Products Export Development Authority.
The Seafood Exporters Association of India expects exports to cross the $6.5bn mark. And shrimps would account for more than 70pc of the total exports of seafood from India. Interestingly, the southern Indian state of Andhra Pradesh will account for more than two-thirds of India’s marine exports.
The state has the largest acreage for cultivation of shrimps. India accounts for about 35pc of the global frozen shrimp exports, according to rating agency Icra, which expects exports to jump by 25pc to 30pc in the current fiscal.
An Icra report points out that exports to the US are likely to expand, based on “weak production dynamics in Vietnam, coupled with increasing demand in Japan and the EU.”
“Lower domestic production in China during 2017 owing to the persistent disease issues, too, is expected to drive growth in shrimp exports to China,” said the report.
As for the recent bans on shrimp imports by Thailand and Kuwait, Icra says it will have a negligible impact on the Indian frozen shrimp industry, as they constitute a mere 0.3pc of the total frozen shrimp exports from India.
Published in Dawn, The Business and Finance Weekly, May 7th, 2018