Export earnings of seafood companies are likely to take a drubbing, with global demand flagging in the backdrop of trade tensions between nations.
“With global demand slowing and trade tensions contributing to a more challenging market, multiple seafood exporters are seeing trade contractions in 2019, following a positive performance last year, particularly in Asia. China’s total seafood exports are likely to reduce significantly for the year, while export revenues of Indonesia, India, and the Philippines are also set to take a hit,” said a report by Globefish, a unit of the Food and Agriculture Organization (FAO) of the United Nations.
India’s seafood export sector is a thriving market, exceeding over $7 billion in value. Marine products from India are shipped to the US, the EU, Japan, and South-East Asia. India also happens to be the largest supplier of shrimps to the US.
The report by Globefish added that Norwegian exports are expected to remain steady on good price levels for its most important species, while for Latin American exporters, a strong salmon market and high fishmeal production is likely to send total exports rising.
On the market side, Japan, the EU and the US all saw a decline in the total value of seafood imports in early 2019, offsetting some of the gains achieved last year. In developing economies, import growth is set to slow but remain positive, the report added.
The impact of the US-China trade war will persist throughout 2019, with the additional possibility of an escalation in Trans-Atlantic tensions between the US and the EU.
Jolted by low shrimp prices, which had plunged below the production cost last year due to a glut in global production and uncertainty in world trade, shrimp farmers are shying away from replenishing stock.
The stocking of shrimps in Andhra Pradesh, Tamil Nadu, and Odisha has reduced 40 per cent, compared to the February-March period last year.