Rough weather ahead for seafood exporters

MUMBAI:Indian seafood exports have been facing rough weather over the past few months due to poor demand from Europe and US, a fluctuating rupee and high cost of raw materials.

According to Seafood Exporters Association of India, the total exports in the previous financial year amounted to $1.8 billion. This would be down to approximately $1.7 billion in 2008-09, according to the association.

Anwar Hashim, the president of Seafood Exporters Association of India, based in Kochi, Kerala, said: "Over the past few months, the economic downturn coupled with rising price of raw materials in India is making the business unviable for exporters."

To make matters worse, most of the boats were not leaving the Indian docks due to high diesel prices despite the price of crude oil coming down drastically over the past few months.

Besides, most of the buyers in the US, Europe and Japan are not booking any new consignments with Indian seafood traders as they site very low offtake and demand of the previous consignments. As a result, a number of fishermen in Kerala have cut down production, pushing up price of fish in the local market.

So, even though the international rates have fallen due to low demand, the Indian seafood market is quoting sharply higher. "The price of seafood across the board is higher by nearly 15% in India, making it very uneconomical for purchase," the head of the Maharashtra chapter of the Seafood Exporters Association, Gul Kriplani said.

He stated that while the business had been 'normal' during the first six months of the financial year, since November there has been a substantial decline in demand. Seafood generally sees peak export demand ahead of Christmas and New Year. However, this year, due to the global slump, demand remains very poor.

"We reckon that the export business across the country would have fallen by nearly 25% from the previous year," he added.

He indicated that in Mumbai, the association has been talking with seafood brokers and boat owners to reduce the costs to match international rates. Banks are also offering a 2% subvention on the interest on loans taken by seafood businesses to alleviate the problems, bringing down the rate of interest to about 8.5%.

Mr Kriplani estimates that even if the situation improves, the decline in demand during the peak season would dent the business considerably.