Reeling from COVID-19, Indian seafood traders unsure of what comes next

India’s seafood industry is beginning to feel the effects of a new wave of COVID-19 sweeping the country.

A shrimp farmer in Gujarat reported to SeafoodSource that farm-gate prices are dropping as farmers in some areas are worried about a rush to harvest early to achieve some value for their crop before anticipated lockdowns or trading restrictions that could be imposed in coming days or weeks. But most farmers he talked with have agreed to avoid “mass harvests."

Separately, a trader from the southeast state of Andhra Pradesh, said that while big cities like New Delhi, Mumbai, and Bangalore have suffered severely from the renewed COVID-19 outbreak, most of the country’s shrimp-processing factories will see less of a direct impact due to their location India’s east coast. However, worries over the virus and lockdowns may create a labor crunch – thousands of workers were reported by The Indian Express to be fleeing big cities across India in advance of potential lockdowns.

“New harvest volumes are picking up, but many factories may soon face workforce shortages, because migrant workers are returning home, fearing another lockdown,” he said.

The second source said shrimp farmers in Gujarat began stocking in late February and early March and so far around 60 percent of stocking has been completed. Some farmers are continuing seeding, but others have decided to delay stocking to the end of May or early June because of worker shortages. Nevertheless, he said the country’s experience with a previous severe outbreak last year should help with planning for the current surge. 

“Luckily, harvesting activities in Gujarat will start toward mid/end of May or June and panic-harvest[ing] can be avoided with systematic planning, as we have some time to plan in advance,” he said.

The current wave of infections is hitting India hard, with an average of 300,000 new cases each day in the past week. Health facilities and crematoriums, especially in big cities, are overwhelmed. The country’s total infections are about 18 million with 201,187 deaths. But the actual figures are likely higher, according to Reuters.

As a result, some global forecasting agencies are revising India’s economic growth forecasts downward. Nomura’s chief economist covering India, Sonal Varma, predicted India’s gross domestic product (GDP) growth will contract 1.5 percent in the current quarter, with “downside risk” coming along with this forecast, CNBC reported. Global forecasting firm Oxford Economics forecasted India’s 2021 GDP growth is likely to reach 10.2 percent, down from a previous estimate of 11.8 percent, The Economic Times reported.

A third source, who has 26 years of experience in shrimp hatchery and farms, said the new outbreak has resulted in a nationwide shortage of oxygen, affecting the supply for shrimp hatcheries.

Contrarily, a fourth source, also a trader from Andhra Pradesh, did not expect a significant impact from the current outbreak.

“It’s too early to predict the impact, but we expect it not to cause major disruptions like last year. We are also not expecting any panic-harvest[ing], as most states’ governments are against any major lockdowns or restrictions,” he said. “The surge in infections is exceptionally high in western and northern parts of the country, primarily urban areas. The rate of infections in Andhra Pradesh and other shrimp farming states is currently lower than in other states.”

A fifth source, a seafood industry source in Gujarat who exports seafood to China, said he doesn’t expect the direct impact of the new coronavirus wave to harm his business as much as concerns about it abroad.

“Our prime minister said now lockdown is not possible and we can fight like we did in the first wave,” he said. “But [buyers] don’t know which parts of India [are affected the most].”

Already hurt by delays in exports to China over that country’s fears of importing COVID-19 on frozen import cargoes, the Gujarati exporter has a further pullback from his Chinese buyers.

“They have stopped buying and [are] telling us their clients are worried,” he said.

India is still reeling from tightening access to the Chinese market caused by stricter customs clearance protocols and skyrocketing shipping rates, according to Amod Ashok Salgaonkar, a seafood sourcing expert based in Mumbai.

“The newly developed COVID-19 rules by China along with stricter scrutiny at local level is resulting in slower container movements,” Salgaonkar told SeafoodSource. “Normally, the payment gets cleared within 20 to 30 days from shipment. However, with this new protocol adoption, the payment release duration has increased to 45 to 50 days.”

India’s Ministry of Commerce and Industry showed India’s seafood exports were worth INR 436 billion (USD 6.4 billion, EUR 5.2 billion) between April 2019 and March 2020, with China accounting for 21.7 percent of the total. But Indian seafood shipments to China fell by 40 percent in value and 36 percent in volume between April 2020 and the end of December 2020.

In response, India appears to be shifting seafood exports to markets in Africa and the Middle East. Indian shipments to Africa have surged – shipments to Cameroon rose by 735 percent in the period April 2020 through the end of January 2021. Shipments to Mozambique – primarily mackerel and scad filets – rose by 139 percent in the same timeframe. Indian seafood shipments to Romania rose 157 percent, and the South Asian country has also scored strong growth in its seafood trade to Iran and Israel, according to official Indian data.

Primarily due to COVID-19, cumulative seafood exports from India between April 2020 to March 2021 declined 17 percent in value and 20.5 percent in volume, according to the Financial Express. But exports could also be declining due to another reason, according to Salgaonkar: new data shows domestic consumption has continued to increase at a 12 percent clip year-on-year in value through the coronavirus crisis. This suggests the market at home may help offset some of the sales lost in China, Salgaonkar said.

Additional report by Mark Godfrey

Photo courtesy of weera sreesam/Shutterstock