MARINE PRODUCTSPresenter:

Sameep Bansal

MBA – International Business

ASIA ECONOMY WATCH JUNE 2008

India’s seafood exports, which stagnated few years back, are likely to touch over $3.5 billion from current level of $2.2 billion by 2009, provided a key thrust area include value-addition, expansion of aquaculture, technological upgradation and tapping unexplored resources.

In a paper brought out by Associated chambers of commerce & industry of India (ASSOCHAM) on “Market of Seafoods in India”, it has been projected that India’s Seafood exports, which remained at $1.6 billion in 2005-06 and is anticipated to reach around $2.2 billion in 2007-08, have potential to accelerate faster in view of their growing demand in trading blocks like the EU, Middle East, China, Canada, Russia.

SOURCES

UN Yearbook of International Trade Statics.

DGCI&S India’s exports of principle commodities & countries.

FAO Commodity Statistics. UN Commodity Statistics Facts for You: November 2006 Facts for You: June 2005 Survey of Indian Industry 2007 www.mpeda.com

OBJECTIVES COVERED

Overview Marine Exports What to Export? Know your Product Where to Export? The hungry World. How to Export? Problems you may face. Solutions and Golden future ahead.

OVERVIEW MARINE EXPORTS

THE MARINE INDUSTRY – SOME FACTS Exported to more than 90 countries.

India has one of longest Coastline of 8118 Km.

Global Share of India is 4.2% at second Position, while China has 69% share.

Has one of largest area under Estuaries, backwaters and Lagoons, which are highly conductive for developing capture as well as culture fishes.

FACTS CONT

Employees 30 Lac people, contributes 1% to Indian GDP and 4.5 % to Agriculture and Allied products.

Indian Fishing Industry got a major boost after the declaration of EEZ (Exclusive Economic Zone) in 1977.

Major Exporting States are AP, Kerala, Tamil Nadu, West Bengal.

Potentially Unexplored states are Gujarat, Orissa, Maharashtra.

Major products are Shrimps, frozen fish, cuttlefish, squid and dried items.

KNOW YOUR MARKET – TRENDS IN EXPORTS

WWW.MPEDA.COM

Marine product exports has steadily grown over the years; from a mere Rs.3.92 crore in 1961-62 to Rs.8363.53 crore in 2006-07 , 1.4% of the total exports from India.

Until 1960 Products were Dried Shrimps and Dried Fish Market was neighboring countries.

From 1960 – 1977 Products were Frozen Shrimps Major market beside neighboring countries

were USA, Japan. USA emerged as single largest buyer.

1977 – 2001 Japan Emerged as single largest buyer followed

by Western European Countries.

KNOW YOUR MARKET CONT.

2001 – 2004USA again topped the charts as Single largest

importer of Indian Marine Products. 2005 – till date

European union became largest importer importing 33% of Products

Japan 16.18% USA 16.12 % China 13.83% South East Asia 7% Middle East Asia is New emerging Market. The product preference is shifting from Frozen Shrimps to

Processed Products and other marine products.

MARINE PRODUCTS – THE UNTAPPED POTENTIAL

THE HINDU – SURVEY OF INDIAN INDUSTRY 2007

Meager utilization of natural gift. Total production

Potential – 15 Million Tonnes Production – 2.5 Million Tonnes

Fresh waters and Ponds Total Available – 2.4 Million Hectares. Utilized – 1.5 Million Hectares.

Production Per Hectare (Pond Culture) Potential – 5 Tonnes per Hec. Production – 2 Tonnes per Hec.

Production Per Hectare (Reservoirs and Tanks) Potential – 600 Kg per Hec. Production – 100 Kg per Hec.

What to Export??

WHAT TO EXPORT?

Traditional Items: Shrimps - Oyster - Tuna Fish Squids - Lobster - Frozen Fish Cuttlefish - Shark - Squids

Value Added Items. Cultured Shrimp Battered Shrimp Cook Shrimp Fish Fillet.

WHAT TO EXPORT  Year   Export Variation (%)

2002-03 Q 467297 42827 10.09

  V 6881.3 924.26 15.52

  $ 1424.9 171.55 13.69

2003-04 Q 412017 -55280 -11.83

  V 6092 -789.36 -11.47

  $ 1330.8 -94.14 -6.61

2004-05 Q 461329 49312 11.97

  V 6646.7 554.74 9.11

  $ 1478.5 147.71 11.1

2005-06 Q 512164 50835 11.02

  V 7245.3 598.61 9.05

  $ 1644.2 165.74 11.21

2006-07 Q 612641 100478 19.62

  V 8363.5 1118.23 15.43

  $ 1852.9 208.72 12.69

ITEM WISE EXPORTSITEMS  % Share to

Total  APR-MAR APR-MAR VARIATION (%)

2006-07 2005-06

Frozen Shrimp 22 Q 137397 145180 -7784 -5.3653.88 V 4506.08 4271.51 234.57 5.4953.84 $ 997.64 970.43 27.22 2.8

  UV$ 7.26 6.68 0.58 8.63Frozen Fin Fish 44 Q 270751 182344 88407 48.48

17.37 V 1452.88 998.7 454.18 45.4817.38 $ 321.95 225.95 96.02 42.5

  UV$ 1.19 1.24 -0.05 -4.03Frozen Cuttle

Fish 9 Q 55701 49651 6050 12.19

9.53 V 797.37 549.15 248.22 45.29.49 $ 175.75 124.48 51.27 41.19

  UV$ 3.16 2.51 0.65 25.86Frozen Squid 8 Q 47252 52352 -5101 -9.74

6.8 V 568.32 575.52 -7.2 -1.256.81 $ 126.25 130.49 -4.24 -3.25

  UV$ 2.67 2.49 0.18 7.19Dried items 4 Q 24293 14167 10125 71.47

2.19 V 183.16 132.56 50.6 38.172.2 $ 40.75 30.03 10.72 35.71

  UV$ 1.68 2.12 -0.44 -20.85Live items 0 Q 2478 2568 -90 -3.5

0.77 V 64.06 61.71 2.35 3.80.77 $ 14.22 13.99 0.24 1.69

  UV$ 5.74 5.45 0.29 5.4Chilled items 1 Q 7200 5060 2140 42.29

1.4 V 117.3 81.56 35.74 43.821.44 $ 26.63 18.4 8.23 44.72

  UV$ 3.7 3.64 0.06 1.7Others  11 Q 67571 60841 6730 11.06

8.06 V 674.35 574.58 99.76 17.368.08 $ 149.72 130.46 19.26 14.76

  UV$ 2.22 2.14 0.07 3.33TOTAL  100 Q 612641 512164 100478 19.62

100 V 8363.53 7245.3 1118.23 15.43100 $ 1852.93 1644.21 208.72 12.69

  UV$ 3.02 3.21 -0.19 -5.79

WHAT TO EXPORT - TRADITION SO FAR.

Shrimp – 20% of world’s imports. Mainstay in India’s Exports 65.88% (2004), 53%

(2008)

200 world class Seafood processing factories.

Kerala has 40 percent of the total processing Industries, followed by AP, Tamil Nadu and Gujarat.

CHANGING TREND

The India’s exports of Shrimps and frozen Squid are declining year on year.

One major reason of decline is Export of Cheaper Vannamei Shrimps from neighboring countries.

The trend is shifting towards Value Added Products and Processed Shrimps.

New Potential Species are Mud Crabs, Tuna Fish, Sea brass, Mullets, and Pearl Spot fishes.

INDIA - A SEAFOOD PROCESSING HUB

The government has allowed import of raw materials required for processing plants.

More Thrust is given on “Ready to Eat” and “Ready to Cook” kind of processed items.

First seafood processing zone was developed in Kolkata, with investment of Rs 480 million.

The processing zone started with 10 large scale private sector processing units.

NEW PRODUCTS - TUNA FISH NEW FISH TO FRY

Tuna fish is third most traded Fish internationally.

Tuna fish exports are targeted to reach 400 million dollar by 2010.

Andaman and Nicobar Island holds 25-30 per cent of tuna potential.

NEW PRODUCTS – MUD CRABS

Technology for hatchery seed production of Mud Crabs and Sea Bass fish has recently been developed by CIBA (Central Institute of Brackish Water Aquaculture) and MPEDA .

Potential sites spotted for this are Tamil Nadu and Andhra Pradesh.

Mud Crab is identified as best substitute of Shrimps.

By using the technology 1 lakh tonnes of Mud Crabs can be produced giving revenue of Rs. 2000 Crores.

NEW PRODUCTS – SEA BASS FISH

High valued Sea Bass Fishes can tolerate wide variation in environmental conditions.

It can be produced in vast coastal region example Andhra Pradesh, Tamil Nadu, Kerala, Maharashtra.

The technology has been perfected in Southeast Asia, and is in nascent stage in India.

One kilogram of Sea Bass fish can give a revenue of Rs 100.

ORNAMENTAL FISH – NEW FISH IN TOWNWWW.E-PAO.NET

Most popular among Hobbyist. Used in Aquariums around the World. Major Exporters Singapore, Hong Kong, Malaysia,

Thailand, Philippines, Sri Lanka, Taiwan, Indonesia and India.

ORNAMENTAL FISH – CONT.

Major Importers USA, Japan and Europe. China and South Africa are Emerging Markets.

Global Trade of $5 Billion annually, growing by 6%.

India Exports worth Rs 1.58 Crores, growing at 20% annually.

The tropical ornamental fishes from North eastern and Southern provinces of India are in great demand in the hobbyists market .

Loaches, Eels, Barbs, Catfish, Goby

VANNAMEI SHRIMPSMINT NEWS, 14 NOV 2007

India mainly produces Black Tiger Shrimp (1.5 lac tonnes).

It has faced stiff competition from Chinese Vannamei Shrimps because It has low production cost, and therefore cheap. Resistant to virus diseases.

VANNAMEI SHRIMPS CONT

Per Hectare production is 20 tonnes, against 2-3 tonnes of Black tiger Shrimp.

Margins from 3 tonnes of Vannamie Shrimp is more than margins from 3 tonnes of Indian Shrimps.

China produces 6.5 lac tonnes , Thailand 4.5 lac tonnes, Indonesia 4 lac tonnes and Vietnam 3.5 lac tonnes and there annual production is rising.

Where to Export??

WHERE TO EXPORT?

Declining Markets EU (26%)

Spain UK Italy

USA (23%) Japan (16%)

Emerging Markets

• Vietnam• Belgium• Canada• Germany• Hong Kong• China(14%)

COUNTRY WISE EXPORTS

COUNTRY % share   APR-MAR APR-MAR VARIATION %

  to Total   2006-07 2005-06    

JAPAN 11 Q 67437 59785 7652 12.8

  16.18 V 1353.38 1155.97 197.42 17.08

  16.15 $ 299.2 262.79 36.41 13.85

USA 7 Q 43758 55817 -12059 -21.6

  16.12 V 1347.8 1639.24 -291.44 -17.78

  16.03 $ 297.08 372.62 -75.54 -20.27European

Union 24 Q 149760 136842 12918 9.44

  33 V 2759.92 2134.25 625.67 29.32

  32.97 $ 610.86 484.02 126.84 26.21

CHINA 33 Q 203513 137076 66437 48.47

  13.83 V 1156.96 849.45 307.52 36.2

  13.98 $ 259.06 191.99 67.06 34.93South East

Asia 11

Q 67650 60140 7510 12.49

  7.37 V 616.7 585.85 30.85 5.27

  7.36 $ 136.43 132.7 3.72 2.81

Middle East 4 Q 23599 22270 1329 5.97

  4.44 V 371.47 307.65 63.82 20.74

  4.46 $ 82.56 69.64 12.92 18.55

OTHERS 9 Q 56924 40234 16691 41.48

  9.06 V 757.3 572.9 184.4 32.19

  9.05 $ 167.75 130.44 37.31 28.6

TOTAL 100 Q 612641 512164 100478 19.62

  100 V 8363.53 7245.3 1118.23 15.43

  100 $ 1852.93 1644.21 208.72 12.69

How To Export?

HOW TO EXPORT?

Chennai Port handles 24% in terms of Value, but the carriage is declining over the years, the emerging high capacity ports are Haldia Tuticorin Kochi

MPEDA – MARINE PRODUCTS EXPORTS DEVELOPMENT AUTHORITY Head Quatered – Kochi (Kerela) 6 Regional/ 4 Sub- Regional Offices 2 International Offices – New York and Tokyo.

VISION - MPEDA

Our vision is to achieve the export of 5 Billion US $ worth marine products by 2014-15 that too with the 75% contribution of value added items.

SCHEMES - MPEDA

Logo Scheme – to gain wide market acceptance.

Active participation in 15 International Trade Fairs.

A delegation consisting of Indian Exporters were send to Japan to address the quality issue. The exporters made series of presentations in major cities of Japan.

CHALLENGES

CHALLENGES

Impose of Anti-dumping duty by US in 2004.

Japan and EU imposed strict quality control standards on Indian Marine Products.

Indian Exports are Single Product (Shrimp) and Single Market (USA and Japan) oriented Industry.

Diesel accounts for 75% of Input cost, escalating diesel prices i.e. from Rs 5 in 1991 to Rs. 40 present is major challenge to overcome.

CHALLENGES CONT.

The Global imports of Shrimp are declining and demand towards processed food is increasing. Low scale Indian Exporters lack Risk Taking capacity to jump into technology Sophisticated Processed food Industry.

As a result of Above, the financial institutions have lost confidence in Small and Medium Players dominated Indian Fisheries Industry.

EXPORT STRATEGY It is necessary to treat marine products as technology

Intensive sector.

“Value addition has been considered as the thrust area. Indian seafood processing units will be encouraged to go in for value addition and export through setting up new units, expanding their capacity and diversifying their current activities. Foreign collaboration, investments, tie ups in marketing of value added products and fish import for further processing and export in value added forms will be encouraged.” -

G. Mohan Kumar  Chairman, MPEDA

Indian Logo – MPEDA logo scheme

STRATEGY CONTINUED

Products Mud Crabs Tuna Fish Sea Brass Ornamental Fish

Markets Vietnam Belgium Canada Germany Hong Kong China

Processed Exports Vannamei Shrimps

Thank You