Indian shrimp export, says rating agency CRISIL, could nearly double to $7 billion (Rs 45,000 crore) by 2022, driven by strong demand, high quality and improved product mix. And, an increase in aquaculture area in Andhra, Gujarat, Odisha and West Bengal, while Asian rivals battle structural issues and rising domestic consumption.
CRISIL notes India became the biggest exporter of shrimp in FY16, ahead of Vietnam by $100 million. A year on, the country has decisively pulled ahead, at $3.8 bn of export against Vietnam's $3 bn last year.
Since 2010, shrimp production in Asia has been hit by disease, flooding, labour issues, and tightening environmental norms. Output in Vietnam has declined by 40 per cent from peak levels because of shortage of fresh water, salinity intrusion and illegal shrimp farming. Thailand, once the top exporter, is now ranked fifth, after a 65 per cent plunge from peak levels. In 2016, China's shrimp production dived by 60 per cent even as its consumption more than doubled, rendering it a marginal exporter. All these countries also faced significant quality challenges.
Indian exporters have, in recent years, emphasised on lowerdensity shrimp farms to control disease, while maintaining quality across the value chain. "What also helped was the use of resilient and specific pathogen-free brood stock imported from the US. Consequently, between fiscal 2012 and 2017, India's production doubled and helped it grab the opportunity created by lower supplies from Asia," says the CRISIL report.
"We are hopeful that $7 bon is achievable, depending on the land policy of respective state governments. The quality of Indian shrimp is also improving," said Tara Patnaik, chairman of Falcon Marine Exports, the country's largest seafood exporter.
CRISIL studied 75 exporters whose revenues grew at a compound annual growth rate of nine per cent between 2014-15 and 2016-17, to a little over $2.2 bn. These exporters contributed about 60 per cent of India's total. Their debt to equity ratio improved to under one from a little over 1.3.
"As a result, between fiscals 2015 and 2017, the average credit ratio (or upgrades to downgrades) of CRISIL-rated shrimp exporters stood at over seven. This is significantly higher than the average credit ratio of about 1.4 times for the entire CRISIL portfolio during the same period, which underscores the structural improvements and strong tailwinds in the sector," says Subodh Rai, senior director at CRISIL.
Larger Indian exporters are also expanding their infrastructure to cater to increasing demand for value-added products from big global retail chains and restaurants. "Therefore, we foresee value-added exports also rising from the current 15 per cent levels significantly," the report adds.