Indian shrimp raw material prices are on the rise in August and into September as the second main harvest of the year has been met with high demand, sources told Undercurrent News.
On top of this, concerns remain among some that the EU could look to ban Indian shrimp, reportedly due to increasing incidences of traces of antibiotics being found.
Prices hit a low in July but quickly rose in the first part of August; this rise continued into September, though not at such a steep rate.
At the start of September prices had reached INR 450 for 30 count per kilogram, head-on, shell-on raw material; INR 380 for 50 count; INR 325 for 70 count; and INR 270 for 90 count.
For the full update on prices, see Undercurrent's prices portal.
“Landings remain quite weak in India in general,” one trader told Undercurrent earlier in September. “Quantities of smaller sizes are more prevalent, as the second crop has just begun in several areas.”
This crop was expected to be in full swing by around mid-September, he noted, though this was not expected to stop prices from continuing to rise.
“We heard prices are likely to remain on an upward trend; demand remains quite strong and competition among packers for raw material is still fierce,” he said. Some packers still have many loads to be shipped in the next month or so.
In terms of Asian sales, the trader said demand from China was fairly strong as Indian size profiles matched those buyers' needs for small and medium sizes. Vietnamese demand was down significantly in late August and September, as its own harvests picked up, he added.
Rahul Kulkarni, director of Westcoast Group, told Undercurrent he certainly did not consider the second crop anything like a “failure”, adding it was early to judge the crop's success yet.
He also said price movements in September, and later into the fall, would be linked as much to rising demand for holiday periods in the EU and US as it would the supply side.
In Tamil Nadu, meanwhile, the upward trend in raw material prices halted early in September, and actually dipped, due to price differences between this province and Andhra Pradesh, where harvesting began slightly earlier, said Durai Balasubramanian, secretary of the Pattukottai Shrimp Farmers Association.
He predicted prices would only begin to rise again after September was over, citing good raw material availability in several states.
Tushar Marde -- a farming source based in Maharashtra, India – also confirmed prices had risen from July's lows, but added that prices to the farmer in his region remained some INR 30-40 below those in Andhra Pradesh.
He cited INR 400 for 30 count; INR 310 for 50 count; INR 240 for 80 count; and INR 200 for 100 count. Profit margins remained far too tight for comfort, he said.
At Vietfish, at the end of August, shrimp producers told Undercurrent they expect Chinese buyers to look to India this fall; Chinese demand is likely to keep prices in all shrimp producing nations relatively stable, they felt.
'Staring at a ban'
The past two months there has been some talk in media, and from Undercurrent sources, of the potential of the EU banning Indian shrimp imports, apparently over increasing incidences of traces of antibiotics being found.
“The EU commission is always considering a ban or restriction on something; I wish to hell they would simply ban or restrict themselves,” said Derek Golding, chairman and founder of UK importer Seahawk Marine Foods.
“There are always rumors about such things. For anybody to suggest that Indian shrimp exporters as a whole would not be concerned about the prospect of a ban is utterly moronic.”
“There would also be serious governmental concerns, given the massive advances made in Indian aquaculture production standards and controls, and the huge dollar revenues generated for the Indian treasury,” he added.
There are some Indian exporters who now refuse to deal with EU importers because of the unfair way they feel which third country imports are treated, he added.
Kulkarni, on Sept. 8, confirmed the Indian industry and government were “in the thick of meetings and discussions” around the topic of a potential ban.
“We are really worried over the eventuality of the EU banning Indian seafood imports. It’s more geo-political than actual quality issues, but the sector is suffering and now staring at the ban,” he said.
EU teams are scheduled to visit and audit several plants in the coming months, and the hope is this should allay fears and allow trade to normalize, Kulkarni said.
“The government and the industry has taken this seriously, and a slew of measures have been planned as well as some implemented.”
Balasubramanian, meanwhile, said he felt any ban would be undeserved, as “already lots of efforts have been taken to address the antibiotics issue”.
On Sept. 18 the Global Aquaculture Alliance (GAA) also warned India was in trouble with the EU for "continued flouting of its rules regarding the presence of antibiotic residues in export shipments".
Tests undertaken by official EU control laboratories apparently showed the level of compliance of aquaculture products was unacceptable, particularly in regard to the presence of residues of chloramphenicol, tetracycline, oxytetracycline, chlortetracycline and metabolites of nitrofurans.
The EU has announced an audit of the country’s pre-export control procedures at the end of November, said GAA. "If the results are found to be unsatisfactory, a ban on imports is a very real possibility in the New Year."
Another option is for the EU to ramp up inspections to 100% of shipments, which would place a heavy financial burden on importers, it added. Currently 50% of shipments are inspected, and this has already upped the burden on said importers.
Source Undercurrent News