Indian seafood exporters hit the Great Wall as China detects Covid in packaging materials

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The rise in the number of Indian seafood export firms banned by China in the wake of detecting Covid nucleic acid on packaging materials has started to worry shippers. From a meagre single digit level during June and July, the figure has crossed 50, forcing companies to find alternate markets to stay afloat.

The seafood export fraternity has called for intervention at the highest level especially after initiatives at the level of GACC (General Administration of Customs of China) and the Marine Products Export Development Authority in India and the Export Inspection Agency have remained futile.

The Seafood Exporters Association of India has also taken up the matter with the government considering the impending Christmas demand. China is the most important market for exporters who deal with small sized shrimps and squids, among others.

Also read: ‘China using pandemic as an excuse to block Indian imports’

Shaji Baby John, Chairman and Managing Director of the Kochi based Kings Infra, told BusinessLine, out of the banned companies, around 40-50 are from Andhra Pradesh alone. Around 100 exporters are affected by the issue and the consignment rejection has hit their business badly.

Price drop

India, John said, is the cheapest source of raw material supplier to China, especially small shrimps and the ongoing issue has led to a price drop by 20 per cent. The current economic situation and the rising Covid cases are reportedly festering the issue.

Official sources said that there are still cases of detection of Covid nucleic acid in packages and the indefinitely suspended units will be inspected virtually by GACC. They have to clear defects noted to get back their registration to export to China. As many as 52 companies have been indefinitely suspended and 16 were inspected till now.

Lakkaraju Satyanarain (Tikku), consultant for Shrimp Improvement System, Florida, in India said that because of the issues with India, China is depending more on Ecuador helping itself to the order of around 25,000 tonnes of shrimps in September whereas Indian exports had dropped to 10,000 tonnes from 17,000 tonnes.

Ecuador is pushing more than 40,000 tonnes on a monthly basis which would have a negative impact on Indian consignments.

Surging demand

However, the surging demand from the US and stability in the second crop in the East-West Godavari region have revived hopes, especially in the increase in the area of culture (new farm lines) by about 10,000 hectares.

On the alternative markets, Shaji Baby John said there has been a huge demand from the US, Europe, Japan ahead of Christmas, but the rising freight cost by around 300-500 per cent is a major concern. Last year, the freight cost to the US was $6,000, which moved up to $18,000 this year.

With a good crop season now, John said, farmers are focussing on quality and bigger size shrimps and looking to other markets due to the subdued demand from China.

MPEDA had consulted the Centre for Cellular and Molecular Biology (CCMB), Hyderabad, to tackle the rising incidents of detection of Covid nucleic material in export consignments. It was in turn advised that seafood shipments to China may be disinfected by following a protocol to rule out the presence of Covid nucleic acid in the consignments.