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14
December 2017
 |
Shrimp (The Total
Investment & Insurance Solutions)
Shrimp
exports from India is expected to nearly double to USD7 billion by 2022, driven
by strong demand, high quality, improved product mix, and an increase in
aquaculture area in Andhra Pradesh, Gujarat, Odisha and West Bengal – even as
its Asian rivals battle structural issues and rising domestic consumption,
according to a CRISIL report. India has so far racked up USD3.8 billion shrimp
exports in fiscal 2017. The Total Investment & Insurance
Solutions
Since
2010, shrimp production in Asia has been severely affected by diseases, floods,
labour issues, and tightening environmental norms, pointed out the CRISIL
report. This has helped India move ahead of other shrimp exporters. Indian
exporters have in the past few years emphasised on lower-density shrimp farms
to control diseases, while maintaining quality across the value chain. What
also helped was the use of resilient specific pathogen free (SPF) brood-stock
imported from the United States. Consequently, between fiscal 2012 and 2017,
India’s shrimp production doubled, and helped it grab the opportunity created
by lower supplies from Asia, according to the CRSIL report.
CRISIL
rates 75 shrimp exporters, whose revenues grew at a compound annual growth rate
of 9% between fiscals 2015 and 2017 to over USD2.2 billion, and contributed to
~60% of India’s shrimp exports. Their gearing, or debt to equity ratio, has
improved to under 1 time from over 1.3 times, and strengthened their credit
profiles. Says Rahul Guha, Director, CRISIL Ratings: “Strong volume growth and
higher proportion of value-added products will bolster the operating
profitability of CRISIL-rated shrimp exporters. Additionally, healthy
accretions and the absence of major debt-funded capital expenditure will reduce
leverage and further strengthen their credit profiles.”
As
CRISIL has forecast increased shrimp exports, it adds, “Going forward, how the
rupee moves and protectionist tendencies and increasing stringency towards
quality, among importer nations would be the key monitorables.”
With
the macroeconomic data released by the government that the current account
deficit has widened this year, the CRISIL forecast in shrimp exports is more a
target to be achieved by the country, as a whole, rather than an extrapolation
of recent good performance.The Total
Investment & Insurance Solutions
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