The Indian aquaculture sector faced many challenges in 2024. While the industry has gained better positioning in government policies, farmers are still grappling with uncertainty. Think Grain Think Feed connected with Balasubramaniam V, founder of Certitude Farms in Tamil Nadu and general secretary of the Prawn Farmers Federation of India, who brings over three decades of experience, to gather insights on the industry’s review and market projections for 2025. Below are the excerpts:
What were the biggest challenges faced by the aquaculture industry in 2024?
The major issues faced by Indian shrimp farmers and, consequently, the entire sector in 2024 include:
Productivity issues related to inconsistencies in seed performance due to inadequate broodstock genetics, which fail to cope with field ecology inundated with both known and unknown pathogens. As a result, the success rate of farming operations is steadily declining. This, combined with the continual increase in input costs and a decline in the efficiency of inputs, has driven the cost of production to levels that are almost equal to, or at times beyond, the selling price of the produce, thereby eroding profit margins for farming operations.
The continuing oversupply of shrimp in the global market, particularly from Ecuador—where production is rising due to pathogen-tolerant seeds—has compounded the issue. On the other hand, the largest importers of Indian shrimp, the USA and China, have reduced consumption due to inflation-related challenges. Oversupply and shrinking markets have put enormous pressure on export prices, completely eroding profits for both farmers and exporters. The only saving grace in these very difficult times is the weakening Indian rupee, which offers some respite.
Seed-producing hatchery operations have also been constrained by reduced demand from farmers and an oversupply of seeds, which repeatedly fail at the field level.
How has the regulatory landscape for the aquaculture industry evolved in recent
years?
The regulatory landscape in the Indian aquaculture sector has always been reactive rather than proactive. Stakeholders constantly have to push authorities to modify the regulatory framework to suit the sector’s current realities and needs.
That said, in recent times, the regulatory framework has addressed some long-pending issues, including modifications and new guidelines for operating hatcheries, nurseries, high-density farming in controlled environments, and farm registrations. We are also seeing higher engagement with stakeholders.
Yet, a lot remains to be done. For example, we have been pushing for policy and financial support for the domestication and development of pathogen-tolerant and genetically improved broodstock for our native species. The Indian shrimp sector is entirely dependent on an exotic species, the broodstock (parent animals) of which are 100% imported. It is high time the government supported a public-private collaborative project to focus on developing our own broodstock to safeguard our future. However, the government expects the private sector to take up this nationally critical, long-gestation project on its own.
Another issue that requires strong support from the government is the availability of institutional finance for shrimp farming operations. Currently, most financing is done by private sector players at high costs to small farmers. A concerted and sustained push by the government to make institutional financing available to small and marginal farmers would significantly impact their financial viability.
What impact did global supply chain disruptions have on the shrimp industry in 2024, and how did it affect operations?
Global supply chain disruptions were primarily caused by constraints in shipping routes, which led to higher shipping and insurance costs. These increased expenses resulted in lower prices for farmers, delayed shipments to markets, and subsequently, delayed payments for exporters. Overall, the disruptions had a significant negative impact on the shrimp industry, particularly on primary producers, by further weakening the prices for their produce.
Enterocytozoon hepatopenaei (EHP) has significantly impacted the shrimp industry. What is your perspective on this issue?
EHP, combined with white fecal disease, has severely impacted the Indian shrimp farming sector. This disease, which is not native to India, was introduced through imported broodstock and further spread to farms through seeds, becoming deeply embedded in the farming environment. It has become a significant challenge, particularly in coastal regions, where production has drastically declined. Eradicating or preventing the disease seems nearly impossible for farmers.
The only viable solution is to provide farmers with highly resilient, pathogen-tolerant seeds. Currently, only one or two companies supply broodstock that is tolerant to white fecal disease, but more such support is needed to overcome these challenges. Many other Asian countries are facing similar issues.
Though the shrimp industry is facing many challenges, feed players are either diversifying or new players are entering the market. How do you see the role of such developments, and what variations in feed prices have you observed over the past year?
Feed costs account for nearly 60% of overall shrimp production costs, and feed production is controlled by a few large players, many of whom are also exporters. These players maintain profitable margins, regardless of the challenges faced by primary producers. For example, feed imported from Vietnam, even with ocean freight and import duties, is still cheaper than domestically produced feed.
This profitability has attracted more players into the feed sector. Before 2023, exporters reinvested their profits into expanding processing facilities and setting up feed manufacturing units. India produces about 1.5 million metric tons of feed annually, yet this economy of scale has not resulted in lower costs for farmers.
Large farmers who purchase over 1,000 tonnes of feed can buy directly from manufacturers at prices roughly 20% lower than what smaller farmers pay through dealers. This disparity severely impacts small and marginal farmers. To address this, the finance ministry has been urged to allow feed imports from Vietnam to offer farmers globally competitive prices and quality. In the 2024 budget, the import duty was reduced from 15% to 5%, and farmers are now pushing for it to be reduced to 0%.
Ultimately, while more players enter the market, there is no significant benefit for farmers in terms of higher efficiency or lower pricing.
Consolidation is occurring across various segments. In a previous interview, you mentioned that farms like yours are merging with larger operations. How do you envision future in the industry?
Yes, consolidation is occurring in certain parts of Andhra Pradesh. Many farmers, with decades of experience in the sector, are weary from recurring losses. As a result, younger professionals are leasing these farms and consolidating them into larger entities, which benefits both parties.
The key factor driving consolidation in the inland areas of Andhra Pradesh is the relatively lower impact of diseases in these regions. These areas benefit from abundant natural resources and the isolation of farms, which reduces the risk of disease spread compared to the densely clustered operations in the coastal regions. Clustered operations, on the other hand, are typically hotbeds for diseases, as they spread more easily from farm to farm.
Consolidated operations can achieve economies of scale, secure cheaper inputs, and operate more efficiently. However, diseases continue to challenge consolidation efforts. Smaller farms sometimes have better biosecurity practices and are easier to manage. While some consolidation is taking place, the Indian farming sector remains highly fragmented, and it is unlikely that small and medium-sized players will be completely displaced.
What advice would you give to small farmers to help them mitigate risks and thrive in the current environment?
Thriving in the current environment is extremely challenging due to recurring diseases and persistently low prices. Farmers must focus on improving biosecurity, returning to basics, properly preparing ponds, and prioritizing high-quality seeds based on past experiences and advice from neighbors. Maintaining low stocking densities and carefully monitoring farm conditions are also essential.
While oversupply and low demand persist, small farmers have the advantage of lower operational costs compared to larger operators. By ensuring successful crops through better management practices, small farmers can survive these tough times and be well-positioned to benefit when the market eventually rebounds.
What are your projections for the aquaculture industry in 2025, and what challenges do you foresee?
The year 2025 is likely to be as challenging as 2024, if not worse. Demand from key markets like the USA and China remains weak, and there are no major advancements expected in broodstock genetics or seed performance.
To navigate another difficult year, the industry must hope for reduced production in India and Ecuador, along with a recovery in demand from consuming markets. Preparing for a tough 2025 is essential, with the hope that conditions will improve in the latter half of the year.
Although farm gate prices have remained low, retail prices have not decreased in line with the lower cost of production. In fact, retail prices have risen, keeping pace with inflation in Western markets. This is another reason why consumption is not increasing. Retailers are benefiting from the current oversupply situation. How long farmers can endure these low prices will determine the market’s trajectory in 2025.
