Shares of shrimp farming and aquaculture companies Avanti Feeds and Kings Infra Ventures are sharply higher between 5-6% on December 16 on volumes that are significantly higher than the one-month average, on anticipation of greater global market share by Indian exporters going forward.
In a recent development that may influence India's sea food exports to US and EU, Venezuelan Interior and Justice Minister Diosdado Cabello said they are conducting raids on the owner of Venezuela’s largest shrimp-farming company Grupo Lamar, in connection with a plot involving a coup. Shrimp magnate and owner of Grupo Lamar Jose Enrique Rincon is among the accused in the plot.
Moneycontrol is yet to independently verify this development. Shrimps are one of Venezuela's biggest exports, with Grupo Lamar sending 80 percent of its produce to Europe.
Earlier this year, Ecuador, another shrimp producer, had reportedly been over-supplying to the US, a major seafood-consuming economy. the US Department of Commerce in October had decided to reduce duties on shrimp imports from the country, but S&P Global reported citing market sources that price negotiations remain difficult. Also, the latest forecast of return of La Nina conditions by America's National Oceanic and Atmospheric Administration (NOAA) going into early 2025 may mean Ecuador's shrimp growth rate may slow down.
"The global market for shrimp continues to be volatile and global industry expected to face a mixed outlook and I mean growing competition market shifts. However, the forecast continues to be promising, it projected higher volumes of consumption..," C Ramachandra Rao, Joint Managing Director and CFO, Avanti Feeds said during the September quarter earnings call.
Due to cyclonic disruptions in Andhra Pradesh during July and August, the harvest was early, with small-sized shrimps. However, climatic conditions are now favourable, said Avanti Feeds, raising hopes of higher consumption of feed during Q3FY25 compared a year ago.
In value terms, India's shrimp export has been steadily rising between July-October this year, as per data cited by a recent report from InCred Equities. The report also mentioned about a consistent increase in shrimp prices as well as reviving US import prices, which have reached the highest level of CY24 on a monthly basis during October.
A Crisil report dated June 2024 had projected that the revenue for shrimp exporters could grow by 8-10% in FY25, despite stiff global competition. India - the world’s second-largest aquaculture farming country after China - exported seafood worth Rs 60,000 crore ($7.2 billion) in FY24, with shrimp accounting for two-third of the turnover. India's seafood exports had touched 17.86 lakh MT, an all-time high during FY24.
The global shrimp market is poised to grow from $72.16 billion in 2023 to $110.775 billion by 2031, at a CAGR of 5.5% between 2024 – 2031.
Avanti Feeds is projecting that the shrimp export is expected to to rise to 16,000 MT during FY25, a near 20% growth compared to FY24.
Avanti Feeds has a market capitalisation of close to Rs 8,960 crore while that of Kings Infra is around Rs 370 crore. On a YTD basis, Avanti Feeds' shares are up by 56% and Kings Infra Ventures are down 13%.
During the Union Budget announced in July, Centre had announced additional funding measures to facilitate shrimp farming and export, as well as lowered taxes on select imports. Under Pradhan Mantri Matsya Sampada Yojana, the Department of Fisheries' budget allocation had been raised by 54% to over Rs 2,616 crore for FY25. Centre has also been extending support for establishing a network of breeding centres for shrimp brood stock to ensure quality. The Basic Customs Duty on certain shrimp and fish feed was also reduced to 5% to boost productivity and exports.
In 2014, 80 lakh tonnes of fish were produced in India, compared to 170 lakh tonnes today, doubling not just in production but also in exports.
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