India’s rupee has been the worst-performing currency in Asia this year, having depreciated more than 12 percent, closing at INR 71.94 (EUR 0.85) to the U.S. dollar on Thursday, 20 September.
While India’s stock market has struggled during the slump, the weaker rupee is opening up opportunities for the country’s shrimp exporters, as a lower-valued rupee will make Indian shrimp comparatively cheaper in the global marketplace, according to the Economic Times of India.
A glut of shrimp in the first part of 2018 – blamed by many on oversupply from Indian producers – drove prices lower in the first half of 2018, but they are now recovering after production was cut back in many countries, including India.
After dropping by as much as 20 percent, shrimp prices are now up INR 60 to 70 (USD 0.83 to 0.97, EUR 0.71 to 0.83) per kilogram, according to the Economic Times.
Last year, India became the world’s top shrimp producer as well as the top exporter of shrimp to the United States. Out of a total production of more than 600,000 metric tons (MT) in 2017, India sent approximately one-third of its entire production to the U.S., or around 190,000 MT. The U.S. market has become even more important in 2018 as the European Union has tightened its standards for Indian shrimp.
But U.S. buying is down this year, according to the Economic Times, and Indian exporters are locked into contracts at low prices for a few more months, through holiday season in the U.S., according to Tara Patnaik, managing director of shrimp exporter Falcon Marine Exports Ltd.
“Big retailers usually enter into buying contract six months in advance,’’ Patnaik said.
Patnaik told the Times that his company’s shrimp shipments hit a high of 4,000 MT per month but are now down to 1,000 MT per month. However, Patnaik said demand has returned, along with higher prices, and the looming problem is once again on the supply said.
“The prices are better now but we are not getting sufficient supply from the farms to meet the improved demand,’’ Patnaik said.
L Satyanarain, president of All India Shrimp Hatcheries Association, said many shrimp farmers cut back on production or decided to leave their ponds fallow over the last production cycle.
“Discouraged by the low prices, the stocking density in the farm had come down by half in the farms from April,” Satyanarain said. “But with prices improving, production will get better and by December we will be back to normal production.”
Expanded aquaculture efforts in Odisha, West Bengal, and Gujarat apart are helping with that effort, in addition to diversifying India’s supply beyond that provided by Andhra Pradesh, India’s most productive state for shrimp farming.
