Indian seafood exports have recorded an all time high figure of Rs 16,597 crore (approximately $3.508 billion), an increase of about 29% in Rupee terms and around 23% in dollar terms, according to the Department of Animal Husbandry, Dairying and Fisheries, Ministry of Agriculture.
But exports are now facing a major hurdle in the form of a sharp and sudden increase in refrigerated container (reefer) charges. Shipping companies have announced an increase of $1,500 per container from January 1 for all destinations. The hike comes at a time when the seafood sector is besieged by other problems,
including a new petition in the US for higher countervailing duty on shrimp and difficulties in exports to Japan due to a higher-than-acceptable level of ethoxyquin, a food preservative .
Shrimp accounted for around 50% of the value of seafood exports, an all time high of $1.740million foreign exchange earnings. The increase was achieved mainly by a surge in production from aquaculture, mainly the native black tiger shrimp. But the Ministry of Agriculture added that increased production of vannamei shrimp was one of the major reasons for setting the new high benchmark in seafood exports. Vannamei was introduced in 2009 when there was a downturn in the industry due to exclusive monodon culture and an associate disease outbreak.
Only now, the container rate increase is throwing a monkey wrench into the works. Seafood Exporters Association of India (SEAI) sources charged that the hike is arbitrary and India-specific.
"The hike in container charges to destinations like Japan works out to 72% of the existing charge. For Europe, it comes to 44%. The two sectors that have been continuously fleecing the seafood industry are shipping lines and their agents. Both of them are unregulated and don't come under any statutory authority," SEAI
sources said.
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Already, the industry is suffering from the global economic turbulence and escalating cost of operations here. A steep increase in freight rates will result in further hardship and shipping of low- value items won't be viable. Many units specialize in low-value items they will find it difficult to function if freight rates go up further, trade sources told the Financial Express.
