In line with its objective of implementing sustainable fisheries management practices to prevent illegal, un-reported and un-regulated (IUU) fishing and/or misrepresented seafood from entering the U.S, the U.S has introduced the Seafood Import Monitoring Programme (SIMP) covering thirteen species, including shrimp. SIMP becomes applicable for shrimp with effect from December 31, 2018 and, mandates additional data requirements to trace the entire supply chain of seafood from the point-of-harvest to the point-of-entry into the U.S.
Commenting on the impact, Ms. Pavethra Ponniah, Vice President and Sector Head, ICRA Ltd says, “SIMP requirements on shrimp supply chain are expected to create temporary headwinds for export of Indian shrimp harvested from un-registered farms. Most of the Indian shrimp exports to the USA and EU are from registered farms; however, shrimp exports to Vietnam come both from registered and unregistered farms and thereby hampers Vietnam’s re-exports prospects to the USA (owing to the lack of traceability). This is expected to support a shift in shrimp exports from Vietnam to India.”
Since, India started exporting VA shrimp products in early 2010s, the quantity of VA shrimp export has grown at a CAGR of 81 per cent from 2,229 tonnes (CY2013) to 23,973 tonnes (CY2017).
During CY2017, India exported 23,973 tonnes of VA shrimp, accounting for only 5 per cent of shrimps exported from India and only 13.3 per cent of VA shrimp imported by the USA. During 4M CY2018, India’s VA shrimp contribution to the USA increased to 16.5 per cent. Going forward, with increasing value-added facilities being setup by Indian shrimp processors, the proportion of VA exports from India is expected to further increase.
During 2017, Vietnam exported nearly 3.5 lakh tonnes of shrimp (as against nearly 5.4 lakh tonnes by India), with nearly 19 per cent exported to EU followed by 17 per cent exports to Japan and nearly 16 per cent exports to the USA (55,680 tonnes or 8.4 per cent of US requirements). Of Vietnam’s total shrimp exports, nearly 1.5 lakh tonnes (43 per cent) of raw material was sourced through imports from India for further re-processing. Further, Vietnam exported nearly 30,150 tonnes of value added shrimp to the USA (as against nearly 16,700 tonnes by India) and it contributed to 54 per cent (as against 5 per cent for India) of Vietnam’s total shrimp exports to the USA during CY2017.
“Going forward, as Vietnam’s shrimp exports to the USA could be hampered by the SIMP requirements and high ADD, this would impact India’s exports to Vietnam. However, this opens up direct export opportunities for Indian exports to the USA, particularly of VA shrimp. Further, we have also recently witnessed inflow of foreign investments into the Indian aquaculture industry with the USA’s Aquastar Inc. picking up stake in Sagar Grandhi Exports Private Limited during March 2018. Dutch’s Nutreco N.V has also entered into a joint venture with West Coast Group to set up an aqua feed plant in India during June 2018. Similar developments auger well for the Indian shrimp sector in the long-term,” adds Ms. Ponniah.