Domestic market can change the fate of Indian Aquaculture Industry

COVID-19 has impacted all the businesses and Indian aquaculture is no exception in that. Think Grain Think Feed discussed with an Aqua farmer, Dr. Manoj Sharma who is working in the sector for more than 2 decades now and a technocrat, Mr. Rajamanohar of Aquaconnect, which is a pioneer aquaculture technology venture that works to improve aqua farm productivity. Both shared insights for the industry and what should be done to reach the same growth level as that of previous years. Below are the excerpts.
Can you please share about the present scenario of Indian Aquaculture industry? How COVID-19 has impacted the business?
Dr. Manoj Sharma: India holds the number one position in shrimp exports in the world with a total production of 8 lakh tons. But COVID-19 has disrupted the industry like many other sectors. ~70% of the exports used to reach China and the US, one where this pandemic started and others where it is the worst hit, and with an almost negligible share in the domestic market, the industry is in the doldrums. The first crop is lost by at least 60% and even post COVID-19 it will take its own time to recover, we assume there would be 20 -25% of less annual production.
Rajamanohar: COVID-19 has shown an adverse impact on the Indian aquaculture industry in production as well as the post-harvest value chain.
On the production front, we may see a reduction of 20-30% in the production of shrimps due to the lockdown from March to April, the peak stocking period of the year. Temporary shutdown imports across nations created panic among farmers who went stocking earlier which flooded the market with shrimp coupled with less demand from processors resulted in reduced farmgate prices up to 40%. On the value chain front, COVID-19 blocked the transaction between farmers and upstream and downstream players of industry as well. Due to lesser stocking, stakeholders involved may incur a considerable loss in upcoming months.
How does ‘Pradhana Mantri Matsya Sampada Yojana (PMMSY)’ contribute to Indian Aquaculture growth?
Rajamanohar: PMMSY accelerates the Blue Revolution 2.0, bridges the gaps in production and distribution channels, and doubles the current production volume through the creation of necessary infrastructure and strengthening the cold storage chains. The post-harvest management value chain is getting more attention and creates an opportunity for processors/producers to become value-added players rather than just being raw producers/exporters. Modernizing the fish and the shrimp value chain creates a stable market (Supply vs demand), boost employment, and farmers’ income as well. Down the line, this will motivate more entrepreneurs to take up aquaculture as a viable occupation activity.
Dr. Manoj Sharma: I find this is a good initiative by the government but the mechanism of implementation of the scheme on the ground should be single-window and hassle-free.
The policies focus on improving production and processing facilities, though ~90% of Indian aquaculture produce is dependent upon export markets which are badly impacted by the pandemic. What should be done to improve domestic demand?
Rajamanohar: The interesting fact in the Indian aquaculture industry is that the 90% shrimp market depends on overseas exports whereas the farmed fish market completely depends on local market consumption. There is a need to create a local market system for shrimps to increase domestic consumption and increase the farmed fish share in the country’s seafood exports.
Over-dependence on the import markets and the absence of any alternative backup plans threaten the sector’s sustainability during crisis time (i.e., slashed prices & poor market dynamics). Government & private entities and institutions should join hands to promote the domestic market for shrimp through massive promotion and awareness.
Dr. Manoj Sharma: Presently, freshwater fish production is 140 lakh tons (as per the government data) while the fact is that there are hardly any processing houses as it is being handled in a very traditional way. Hence reliability & reference of the data is a question.
Also, domestic demand needs to be improved and even is 1% of this package can be used to capture domestic market, the whole scenario will change.
What is the role of AI for a growing market like India, which is more of traditional farming? Do you feel that the market is ready for such technological interventions?
Rajamanohar:The role of AI is much necessary for India where the prevalence of traditional practices for decades. In the last 6 to 8 years, the productivity per acre has dropped by 30% while the production cost has increased year by year. Implementing AI technologies will analyze the production patterns from every pond and be able to tell the (personalized advisory) farmers about the improvement measures that will boost productivity and adopt sustainable farming practices. Secondly, AI would play a key role in predicting diseases well in advance and facilitate effective prevention management. Every year, the Indian aquaculture industry incurs huge losses due to widespread diseases that are wiping out the production in farms.
There is a huge variation in the productivity between Shrimp production states. eg., Orissa & Tamil Nadu are approx. 4-5 tons/ha while in Andhra Pradesh & Gujarat are in the range of 7-8 tons/ha. The technology adoption may support to cover this gap by recognizing various factors which otherwise remain unnoticed in traditional farming.
As the optimal FCR range is 1.2-1.4 while FCR of Indian shrimp is 1.6-1.8 that means the farmer is feeding 15-20% more feed. With technology adoption, such expenditures can also be controlled and increase profit margins.
Yes, the market is ready for technological interventions, even inclusion of Real-time monitoring and sensing capabilities are possible but it requires customized pricing (subscription/pay as you go) that suits the affordability of the rural and coastal farmers with enhanced last-mile connectivity (Handhold support, hands-on training).
How do you compare the other animal protein sources with fish protein?
Dr. Manoj Sharma: A consumer is spending Rs. 600-700 per kg to get 120 grams of protein from mutton while in case of fish, it would cost Rs. 120-150 per kg for 300 grams of protein. As an industry, we should focus on consumer awareness to change their perception.
What do you predict for the supply-demand scenario for the rest of 2020?
Rajamanohar: We may see a drop of 20-30% in shrimp production this year from 7.7 lakh MT last year. As the massive harvest happened in April and full swing stocking was resumed from June, we may see the current produce hitting the market after August. On-demand front, expect EU market, other markets are performing well, also the opening up of food chains in the overseas market will keep the demand in upcoming months and shall absorb completely what we produce.
Dr. Manoj Sharma: Looking at the situation in a holistic way, the world’s shrimp market is close to 3.8 to 4 Million Ton. The two largest countries that contribute to this production are India (8 lakh tons) & Ecuador (6 lakh tons) which is approx. 40% of the world shrimp market. But unfortunately, both countries don’t have a sizable domestic market. On the other hand, the export markets are impacted like China and the USA which consume 70% of the shrimp production, and Europe which consumes 10% of the shrimp production is also badly affected with COVID-19. The shrimp production markets Indonesia, Thailand, and China will also see a reduction in production. There might be an increase in the market demand as consumers look for nutrition-rich healthier food and shrimp is a perfect match there.
How do you see the Indian aqua feed industry 5 years down the line?
Rajamanohar: Aquafeed industry has seen a progressive growth in the last couple of years and gained attention from global players as well. Most of the key players have been involved in capacity expansion of the feed plants and global players have opened their units in India. According to sources, the Indian feed industry is operating at a capacity of 2.8 million MT, which is double than the current requirement of 1.1-1.3 lakh MT on the ground. In 5 years, down the line, I feel that we may not see such a progressive expansion like in the past, however, we see the technological up-gradation/modernization of the feed plants.