The share prices of publicly traded shrimp companies in India have soared in the last month, and financial news service Moneycontrol is speculating that the Venezuelan government’s takeover of Grupo Lamar is partially responsible.
In early December, the government of Venezuelan President Nicolás Maduro announced it was targeting José Enrique Rincón and sons Juan Diego and José Enrique, claiming they were part of a plot to overthrow his government. The government subsequently took over Rincón’s company Grupo Lamar, Venezuela’s largest shrimp-farming company, as Rincón and his sons fled the nation – joining 7.7 million other Venezuelans that have fled the country since Maduro came to power in 2013.
Since the announcement by Venezuela Interior and Justice Minister Diosdado Cabello, Grupo Lamar has been taken over by an administrative board, and the state’s fisheries and aquaculture ministry INSOPESCA canceled export permits and sanitary certifications for containers on 28 November, urging countries to not permit delivery until new permits can be issued.
Grupo Lamar produced around 45,000 metric tons (MT) of vannamei shrimp in 2022, Grupo Lamar Board Chairman Luis Comella Barboza told SeafoodSource in 2023, and was aiming to increase that to somewhere between 50,000 MT and 60,000 MT in 2023. The company accounts for 80 percent of Venezuela’s total shrimp exports.
In recent years, according to Shrimp Insights, Venezuela has been a growing source of shrimp in the E.U., especially in countries like Spain and France.
As those exports come into question due to the actions of Maduro’s regime, however, India-based financial news publication MoneyControl speculates share price increases at publicly traded Indian shrimp-farming companies are directly linked to the takeover, as companies anticipate higher sales to the E.U.
Avanti Feeds, a large shrimp-farming company in India, has seen its stock price increase from INR 579.85 (USD 6.83, EUR 6.49) on 2 December to as much as INR 663 (USD 7.80, EUR 7.43) on the Bombay Stock Exchange as of 16 December. In Avanti’s earnings statement for the period ending 30 September 2024, the company reported that a larger share of its exports were going toward the E.U.. Therefore, its share increases could also be linked simply to its performance outlook.
Avanti reported an increase in its revenue from operations for the quarter ending 30 September 2024, reaching INR 13.5 billion (USD EUR) in the quarter compared to INR 12.7 billion (USD 149.5 million, EUR 142.3 million) in the same period of 2023. Its profit also increased, reaching INR 1.21 billion (USD 14 million, EUR 13 million) compared to INR 824 million (USD 9.7 million, EUR 9.2 million) in 2023.
“The global market for shrimp continues to be volatile, and global industry is expected to face a mixed outlook. However, the forecast continues to be promising,” Avanti Feeds Joint Managing Director C. Ramachandra Rao said during a conference call.
Coastal Corporation Ltd., another company in India that farms shrimp, has also seen its stock price increase by nearly 20 percent over the past month. In its quarterly results for the period ending 30 September 2024, the company also reported increases in revenue, rising to INR 1.49 billion (USD 17 million, EUR 167 million) from INR 1.11 billion (USD 13 million, EUR 12 million) in the same period of 2023. However, material costs drove down its profit before tax to INR 24.7 million (USD 290,000, EUR 276,000), down from INR 64.4 million (USD 758,000, EUR 721,000).
Another publicly traded shrimp company, Apex Frozen Foods, has seen its share price increase by nearly 18 percent in the last month, rising to INR 273 (USD 3.21, EUR 3.05) as of 16 December from INR 224 (USD 2.63, EUR 2.51) on 26 November.
The increased stock price comes despite poor results for the quarter ending 30 September 2024, which saw decreased revenue and profits year over year. The company posted revenue of INR 2 billion (USD 23.5 million, EUR 22.4 million) for the quarter ending 30 September 2024, down from INR 2.4 billion (USD 28 million, EUR 26 million) in the same period of 2023. Profits dropped to a loss of INR 20.5 million (USD 241,000, EUR 229,000), compared to a gain of INR 113 million (USD 1.3 million, EUR 1.2 million) in 2023.
