Revenue from the export of shrimps is expected to increase by 20% year-on-year (y-o-y) to about $4.3 billion in calendar year 2021 (CY21), driven by a revival in demand and restoration of supply chains that were disrupted last year by the Covid-19 pandemic, according to a report by rating agency Crisil.
According to the study of 97 Crisil-rated exporters, accounting for over two-thirds of the industry’s revenue, lockdowns and supply-chain disruptions meant exports declined to $3.6 billion in 2020 from $4.7 billion in 2019.
Ecuador edged past India with $3.7-billion exports because it had fewer logistical snafus and focused on catering to the voracious appetite in China for raw shrimps.
“India’s shrimp exports contracted 23% in calendar 2020 for two reasons, subdued demand in key export markets because of lockdowns, and disruptions in brood-stock supplies from the US, which impacted the domestic shrimp harvest cycle. The good part is, the second wave of the pandemic has not led to stringent curbs on movement of raw materials and stock, so it won’t be as disruptive as the first wave. Therefore, we expect exporters to manage their operations well and grow an average 20% this fiscal,”Rahul Guha, director, CRISIL Ratings said.
India rose to prominence as a shrimp exporter in the past decade, owing to sharp focus on quality and disease control, and by shifting to the more resilient, specific pathogen free, or SPF, brood stock from the US.
Krishna Ambadasu, associate director, CRISIL Ratings, said “The expected and gradual increase in the share of value-added exports this fiscal also augurs well for exporters. Improved profitability and controlled working capital cycle will limit overall gearing to below 0.4 time and interest cover at over 8 times. That should strengthen credit profiles.”
Crisil reports that the retaliatory tariff proposed by the US on select shrimp products is likely to have minimal impact – estimated at just $6.3 million – on the industry’s growth.
The report added that if the supply-chain disruption in key shrimp-producing states extends into the second quarter of this fiscal, it could curtail growth.