Going forward, with increasing value-added facilities being setup by shrimp processors, Icra expects the proportion of VA exports from India to rise further.
The Seafood Import Monitoring Programme (SIMP) is likely to boost the country's shrimp exports to the US as most of Indian shrimps are from registered farms compared to other producing nations like Vietnam, rating agency Icra said in a report today.
To prevent illegal, un-reported and un-regulated (IUU) fishing and misrepresented seafood from entering the country, the US government has introduced SIMP covering 13 species, including shrimp, effective December 31, 2018.
SIMP mandates additional data requirements to trace the entire supply chain of seafood from the point-of-harvest to the point-of-entry into the US.
Pavethra Ponniah, vice-president and sector head, Icra, said while most of the Indian shrimp exports to the US and EU are from registered farms, shrimp exports to Vietnam come both from registered and unregistered farms and hampers Vietnam's re-exports prospects to the US due to the lack of traceability.
"This is expected to support a shift in shrimp exports from Vietnam to India," she added.
However, Ponniah said the SIMP requirements on shrimp supply chain are expected to create temporary headwinds for export of Indian shrimp harvested from un-registered farms.
Icra estimated that around 2,433 aquaculture farms totalling 12,509 hectares of farmed area were registered under the Coastal Aquaculture Authority (CAA) as of March.
India continued to be the largest exporter of shrimp to the US last year, accounting for 32 per cent in volume of its total shrimp requirements, followed by Indonesia (17.8 per cent), Thailand (11.3 per cent), Ecuador (10.8 per cent) and Vietnam (8.4 per cent).
The rating agency expects Vietnam's contribution to the US shrimp imports to drop in 2019 due to the introduction of SIMP, with India becoming a likely beneficiary.
Further, Icra said, since India started exporting value added (VA) shrimp products in early 2010s, the quantity of VA shrimp shipments have grown annually at 81 per cent from 2,229 tonne in 2013 to 23,973 tonne in 2017.
During the first four months of this year, the country's VA shrimp contribution to the US increased to 16.5 per cent, it said.Going forward, with increasing value-added facilities being setup by shrimp processors, Icra expects the proportion of VA exports from India to rise further.