INDIA’S SHRIMP INDUSTRY

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Context

• India is now the top supplier of shrimps to the United States, marking a significant presence in the global seafood market.

Details

• In the fiscal year 2022-23, India's seafood exports reached a whopping $8.09 billion, with shrimps contributing a substantial $5.6 billion.
• India's dominance in the U.S. shrimp market has risen to 40%, outperforming rivals like Thailand, China, Vietnam, and Ecuador.

India’s Shrimp Industry

• The shrimp industry holds a significant position in India's total seafood basket.
• In FY23, the country's seafood exports amounted to $8 billion, with frozen shrimps commanding a whopping 70 per cent share of this total.
• However, the industry has weathered rough times of late. From losing its crown as the world's top shrimp exporter in 2020 to a COVID-led price crash and rising feed costs, it has faced several headwinds.

Background

• During the early 1980s, there was a global surge in the demand for shrimps, particularly in China and the US. With the strategic advantage of a tropical climate, expansive coastlines and an abundant workforce, India was perfectly positioned to dive into the burgeoning shrimp farming industry.
• The Indian shrimp industry further got a boost when it started cultivating the Vannamei shrimp, in response to the White Spot Syndrome (WSS) that decimated the popular black shrimp populations worldwide.
• As traditional powerhouses like Vietnam and Thailand saw declines, India's shrimp market flourished, capturing 90 per cent of its production in the resilient Vannamei variety and fetching lucrative export prices.

COVID crash

• As per Fishsite, India's shrimp sector suffered a massive blow of $1.5 billion due to the pandemic.
• Although shrimp prices started looking up in FY24, they still remain below pre-pandemic levels.

Burgeoning feed costs

• Shrimp feed boasts a specialised diet, crafted to ensure the vitality and growth of shrimp.
• It is concocted from a trio of essential ingredients: soybean meal, fishmeal and wheat flour.
• However, the journey to sustaining shrimp health with these nutrients has been fraught with economic setbacks.
• Over the past three years, the feed industry has been riding a rollercoaster of price volatility, particularly due to a staggering 40 per cent increase in fishmeal prices due to its global scarcity.
• This uptick has tightened the purse strings of many farmers, squeezing their profit margins.

Future of the Industry

• India's shrimp industry is at a crossroads, caught between opportunity and challenge.
• As a significant portion of India's shrimp heads overseas for additional processing, the nation is missing out on a lucrative slice of the revenue pie.
• Recognizing this gap, companies are pivoting towards producing value-added shrimp products. These premium offerings promise higher profit margins than their standard counterparts, signalling a potentially prosperous shift away from mere commodity trading.
• In a strategic move to bolster the aquaculture sector, the Indian government is stepping up, slashing customs duties on shrimp feed from a steep 15 per cent down to a more manageable 5 per cent.
• Further, by setting a daring export goal of Rs 1 lakh crore to revitalising agricultural vigour through the Pradhan Mantri Matsya Sampada Yojna, the government's actions could herald a new era for aquaculture in India.
• Yet, macroeconomic uncertainty continues to exist. The evolving trade dynamics between China and Ecuador, marked by the signing of free trade agreements, loom as a potential storm on the horizon.
• Should China pivot towards Ecuador for its shrimp supply, the ripple effects could affect India's aquaculture sector. Hence, the future of India's shrimp industry hangs in the balance, waiting for the next tide of developments to unfold.

MUST READ ARTICLE: https://www.iasgyan.in/daily-current-affairs/shrimp-farming-in-punjab