Indian shrimp production to fall up to 20% as price crunch renders farms unviable

Many Indian shrimp farms have lain fallow the last 12 months as high post-COVID inventories stacked up in the world's biggest markets.

Low shrimp prices over the last 12 months have led to many Indian producers fallowing their farms or switching over to alternative species such as freshwater shrimp and fish, Choice Group Director Thomas Jose told IntraFish.
Low shrimp prices over the last 12 months have led to many Indian producers fallowing their farms or switching over to alternative species such as freshwater shrimp and fish, Choice Group Director Thomas Jose told IntraFish.Photo: Shutterstock

Industry sources are predicting a reduction in India's total farmed shrimp production of as much as 20 percent for the rest of the year.

Low shrimp prices over the last 12 months have led to many Indian producers fallowing their farms or switching over to alternative species such as freshwater shrimp and fish, Choice Group Director Thomas Jose told IntraFish.

The Choice Group is one of the largest and most diversified business conglomerates in India. Its seafood division, Choice Canning, was one of the first companies in India to establish an integrated and automated factory for ready-to-eat shrimp in retail bags. It is a major supplier of farmed shrimp to retailers and foodservice companies in the US market.

Other than India's east coast state of Andhra Pradesh, which produces about 70 percent of Indian farmed shrimp, the remaining prominent production states on the east coast, plus those on the west coast fared much worse than the previous year.

Some of the areas with saline groundwater that went into shrimp farming over the last five years as the industry grew, struggled to successfully market their product over the last 12 months.

The news from hatcheries supports the trend, with many reducing imports of specific pathogen free (SPF) broodstock and operating at partial capacity, according to Jose.

While there are what Jose calls "sporadic efforts" from the private sector in India to popularize shrimp consumption among India's largely non-consuming 1.4 billion population in order to rejuvenate the industry's production sector, "it will take time in absence of support from the government," he said.

A success despite the fall

Despite the fall in volume, Indian shrimp crops in 2023 have been relatively successful, "considering the past years," thanks to a reduction in farming area and stocking densities, as well as an improvement in the quality of imported broodstock and seed, Jose said.

However, increased input costs for power, feed and labor combined with low raw shrimp prices and a shortage of migrant workers from other states have prevented farmers from seeding their ponds.

Even though black tiger shrimp farming areas have picked up during the past two years, with the arrival of SPF seed from Hawaii and Madagascar, farmers are finding it difficult to market the smaller size shrimp. "Demand is more for large size shrimp which takes about five to six months grow out," said Jose.

"Small and medium scale farmers find it difficult since the crop cycle is prolonged, affecting the cash flow."

A while coming

Expectations of a price hike on major markets caused some Indian shrimp farmers to hold back product in August, at a point when there were already indications from hatcheries and feed companies that production would be falling.
Prices of Indian shrimp raw material have been low all year, due in large part to US buyers failing to shift post-pandemic inventory as quickly as had been hoped.
A mini price crash in May sparked some panic among farmers, and this was followed by another dip in July at the end of the last growing season, as heavy rains and ensuing rapid harvests added a further slump.

But by the second week of August raw material had dwindled, prompting expectations of a price hike among farmers.

"The expectation is causing farmers to hold back product," said Jose.

The supply fall is seen by many as a necessary evil, with several experts expounding the need for a shrimp supply contraction in order to lift prices.
(Copyright)
Published 9 October 2023, 07:48Updated 9 October 2023, 07:48
Farmed shrimpIndiaChoice Canning