At the core of the current crisis is the unresolved commodity price problem that has plagued the sector for over a year. Input costs such as feed and electricity have risen considerably over the past 12 months, but shrimp prices remain as low as at any point in the 5 years.
It’s an ongoing situation that has left farmers disenfranchised, according to Durai Murugan, owner of Tamil Nadu-based Sea Gem Aqua
Indian farmers are totally played out by global buyers and exporters,” he told Undercurrent. “Last three years, they have picked out Ecuador and other Asian countries like Indonesia and Vietnam for lower prices, forcing farmers to leave empty ponds.
The first crop of the year, harvested from April to June, is expected to showcase a rough 25% drop in volume, according to Undercurrent industry sources, borne out by a sharp drop in broodstock imports across the end of 2022 and early 2023.
Now, the second, smaller crop of the year — usually harvested between August and September — is also understood to be under threat.
Indian shrimp production will take a massive hit heading into the next three months,” continued Murugan. “The continuity of pricing that has happened in the last three years means we may see a big paradigm shift from vannamei to fish or crab. Right now, this shrimp offers zero profitability.
A second source, familiar with the farming situation down India’s eastern coast, agreed.
The stocking rates in West Bengal, Odisha and the Andhra Pradesh district of East Godavari are expected to show “a significant drop” for the year’s second crop, he said, with only certain parts of Andhra Pradesh expected to match last year’s output.
Farming at a loss Taking a deeper look at prices, it’s clear why farmers have so little incentive to stock.
In Tamil Nadu, Murugan put current farmgate prices at INR 400 ($4.85)/kg for 30-count shrimp, INR 300 for 40-count, INR 240 for 60-count, INR 220 for 80 and INR 200 for 100-count.
But at current input cost levels, Murugan estimates the cost of growing 40-count vannamei at INR 330/kg, 60-count at INR 290/kg and 100-count for INR 250/kg.
And that would just be to break even.
Indian government need to look into this matter, especially MPEDA [Marine Products Export Development Authority], to get minimum pricing. Farmers are into deep crisis mode already.”
Manoj Sharma, owner of Gujarat-based Mayank Aquaculture, has a similar view.
In today’s market condition, even up to 20 gram [50-count] vannamei, farmers cannot make money because the offered price is just USD 3.20-USD 3.50/kg, and that is our cost of production,” he told Undercurrent.
“Post-COVID, the feed prices have gone up by 25%, fuel prices have gone up by 25-30%, and the price realization has dropped. So vannamei, up to 20g or 25g in India, especially in my area Gujarat, is not profitable. This is a very painful situation.”
The aforementioned second source agreed that production costs have risen by an average of 15-20% over the past year alone. Feed in particular has increased from an average cost of INR 75/kg to roughly INR 90/kg since 2021, he said. “This cost might inflate even more when the farmers resort to credit purchases,” he added.
Sharma noted that over the last three years, difficult climate conditions have also aided the spread of running mortality syndrome, vibrio and the growth-slowing disease EHP, which has made it “next to impossible” to grow vannamei to large sizes with.
Sheraz Anwar, director of packer Abad Fisheries, also offered a dour view on the current market situation. ”
Prices have reduced from March levels, and are closer to Ecuador on 40/50-count down,” he said. “When it comes to selling stock in hand, we see ridiculous prices being offered to our clients in China, which makes it impossible for Indian suppliers like us to ship head-on shell-on there.”
Coupled with weak local harvests, even value-added exporters are struggling.”.
Anwar gave farmgate prices similar to Sharma, noting that the June average for 50/60 count came to USD 3.50/kg, putting 60/70-count at USD 3.38 and 70/80 count at USD 3.13.
According to the latest farmgate data from the Indian platform Aquaconnect for the state of Andhra Pradesh, prices in week 27 (Jul 3-9) are a little higher than in surrounding states, although only 30-count shrimp are higher than the same week last year
Most concerningly, there has been little to no improvement in prices since the start of the year. It gives prices for 30-count vannamei in the state at INR 440 (USD 5.30)/kg; 40-count at INR 340/kg; 60-count at INR 290/kg; 80-count at INR 270/kg, and 100-count at INR 240/kg.
When compared to the levels of previous years, it’s clear to see that vannamei in 2023 (dark blue line, below) is trading below last year for most predominant sizes and has seen little to no price improvement since the pandemic despite inflation:
Compared to other markets, it can be seen that Asian producers are struggling to compete with Ecuador on price. India is currently roughly on a price par with Thai shrimp, while prices out of Vietnam and Indonesia are a little higher:
Source: Under current news
