A sharp drop in demand has hurt the prospects for record Christmas and New Year seafood shipments from India and complicates hopes of an improvement in last year’s record exports.
India, one of its worst setbacks in recent years, is facing setbacks with all major importers from the US, China, Europe and Japan. The United States is the largest market for Indian seafood, followed by China.
After reaching a new peak of her US$7.76 billion in 2021-22, India has set her target of US$8.6 billion in seafood exports for this financial year. This seemed achievable given the smooth development in the first few months. However, since August, the fishery has had to contend with strong headwinds.
India’s seafood exports have been hit hard by a combination of factors including rising inflation, a looming recession, overstocks, fuel crises, the Russian-Ukrainian war and related issues, and the aftermath of COVID-19. Demand is down 30-35% and if it doesn’t pick up again by January, it could be a disaster.
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Cold storage is full in both production and consumption areas, forcing exporters to limit purchases from farmers. They believe things have gotten better during the pandemic, when supply fell far short of demand. The surge in demand had a positive impact on prices, prompting farmers to produce more than last year. Farmed shrimp make up a large portion of the country’s seafood export basket.
The US, Europe and Japan are facing recessions. The Russian-Ukrainian war and subsequent fuel crisis exacerbated problems in the European market. In China, demand shrank due to the zero Covid policy. As a result, refrigerated stores in most countries are overstocked and supermarkets are slow to renew supply contracts from India.
Ecuador’s farmed shrimp production has reached about 1.2 million tons, making it the world’s largest supplier today. With exports restricted due to the spread of COVID-19 in China, Ecuador is supplying shrimp to the US market at lower prices than India due to cargo advantages.
