SHRIMP PRICE DROPS DUE TO SLUGGISH MARKET

Shrimp exports from India are having a negative impact in the crustacean price as a consequence of demand slump, recession, Japanese currency weakening and overstocking in the main markets.

Sector sources consulted by FIS.com explained that these factors may affect Indian seafood exporters’ profitability in the current fiscal year, especially in the case of frozen shrimp sales, which account for 70 per cent of the total export value of the crustacean.

“Globally the buyers are going for smaller sizes which cost less. This seems to be the new trend across the US, Europe and Japan. While Europe is yet to come out fully from recession, increased health awareness is forcing the US consumers to buy smaller size shrimps,” said Kamlesh Gupta, founder chairman of WestCoast Fine Foods, an exporter who also operates aquaculture farms, The Economic Times reported.

According to Globefish, a unit of FAO fisheries and aquaculture department that reports on international fish trade, the demand has been muted in the US since January 2015 because of large unsold stocks imported in 2014.

Meanwhile, market experts pointed out that the global production of farmed shrimp increased from 3.4 million tonnes to 3.6 million tonnes in 2014, with Asian producers accounting for 3 million tones. These sources also explained that the demand is weak from all major markets of the US and Europe.

Another issue affecting purchases from the Asian market is the fact that the US Food and Drug Administration (FDA) has refused the entry of certain consignments of shrimp exported from India, Malaysia and Vietnam, since the shrimp was found contaminated with banned antibiotics, The Hindu informed.

The refusals involved six different companies from the three countries. Two Indian companies feature in the list – Sharat Industries and Sandhya Aqua Exports from Andhra Pradesh.

On the other hand, Abraham J Tharakan, President of the Seafood Exporters Association of India (SEAI), told BusinessLine that exhaustive testing of shrimps was conducted at various levels before exporting from India.

“Our shipments to the US are USD 2 billion. Stray cases do tend to go unnoticed, but these are very rare and the numbers (rejection) have fallen considerably,” he stressed.

Stating that the Marine Products Export Development Authority (MPEDA) guidelines were rather strict, an executive from Sharat Industries pointed out that the banned consignment would be brought back to India.

“We check the code under which is has been rejected, we reprocess the cargo, and if the residual level is acceptable, we re-export it. Usually, if one grade has failed, we test for other grades,” he stressed.

The spokesperson also remarked that around 40 containers from different Indian exporting companies are regularly rejected by the USFDA.

“Around 5 per cent of exports tend to get rejected. Though we have testing that is conducted in-house as well as by government agencies, minute testing facility is not available in India,” he admitted.

A reduction in the number of shrimp entry lines rejected by US Food and Drug Administration’s (FDA) for containing banned antibiotics was noted in May in comparison to the first four months this year, but the number is still deemed significant.

A report released by the FDA indicates that this federal agency in May prevented 103 seafood entry lines, of which 12 (12 per cent) were for shrimp contaminated with banned antibiotics.

So far this year, the agency has now refused a total of 203 entry lines of shrimp products for the same reason.

The shrimp lines rejected in May at various ports throughout the United States had been exported by six different companies from three Asian countries: Malasya, Vietnam and India:

• Seng Enterprise Seafood Supplier (Malaysia);
• Ria Budimas Trading (Malaysia);
• Fishergold Cold Storage Sdn. Bhd. (Malaysia);
• Quoc Viet Seaproducts Processing (Vietnam);
• Sharat Industries (India);
• Sandhya Aqua Exports Pvt. Ltd. (India).

Southern Shrimp Alliance stressed that so far this year, the FDA has reported refusing 138 entry lines of shrimp shipped from Malaysia for reasons related to veterinary drug residues, 30 entry lines of shrimp shipped from Vietnam, 25 entry lines of shrimp shipped from India, 9entry lines of shrimp shipped from China, and 1 entry line of shrimp shipped from Indonesia.

The organization also remarked that tor both Malaysia and India, there have now been more shrimp entry lines refused by the FDA for reasons related to antibiotics in the first five months of this year than in any prior year reported by the FDA.

Meanwhile, for Vietnam, the only year in which more shrimp entry lines were refused by the FDA for reasons related to antibiotics than 2015 was last year.