shrimp export

PRESENTED BY PARTHA GHOSHMBA- AB (07-09)ROLL NO: 42020

EXPORT POTENTIAL ANALYSIS OF

INDIAN ORIGINFROZEN AND NON-FROZEN

SHRIMPCourse Instructor:

Mr.Mr. Sudhir Chitragar Sudhir Chitragar

Consultant

AGENDA OF PRESENTATIONThe commodity outlineShrimp processingQuality managementDomestic productionWorld productionTop exporters/ importers in the world

Trend in India’s exports (volume & value wise)

DestinationsLogistic Requirements Domestic Cost of ProductionIncidence of FreightInternational Pricing Selection of target marketGuidelines for exports to that target market.Competitor analysis.

AGENDA OF PRESENTATION

MAJOR EXPORTABLE SPECIES

MAJOR TYPES OF SHRIMP EXPORTED IN FROZEN AND NON FROZEN FORMS:

1.Scampi (Macrobrachium rosenbergii)2.White prawn (Penaeus indicus)3.Tiger prawn (Penaeus monodon)4.Brown shrimp (Metapenaeus dobsoni)5.King prawn (Metapenaeus affinis)

SHRIMP PROCESSING

SHRIMP CULTIVATION - GUIDELINE FOR EXPORT GRADE SHRIMP

SELECTION OF SITE FOR ESTABLISHMENT OF POND

SELECTION OF POND

MANAGEMENT OF POND

MANAGEMENT OF WATER

SELECTION OF STOCKING

FEEDING OF SHRIMP

DISEASE MANAGEMENT

HARVESTING OF SHRIMP

PROCESSING

Sr. State Estimated brackish water area (ha.)

Area under cultivation (ha.)

1 West Bengal 405,000 34,660

2 Orissa 31,600 11,000

3 Andhra Pradesh 150,000 50,000

4 Tamil Nadu 56,000 2,879

5 Pondicherry 800 37

6 Kerala 65,000 14,657

7 Karnataka 8,000 3,500

8 Goa 18,500 650

9 Maharashtra 80,000 716

10 Gujarat 376,000 884

Total 1,190,000 118,983

DOMESTIC PRODUCTION: FACTS AND FIGURES

*(Source: MPEDA, 2007)

DOMESTIC PRODUCTION:FACTS AND FIGURES

*Source: Economic Review, 2007


*Source FAO data

*Source: Global Trade Atlas, with FAS, USDA estimates

*Source: Global Trade Atlas, with FAS estimates

*Source: www.commerce.nic.in

*Research conducted by trade knowledge network: www.tradeknowledgenetwork.net

DOMESTIC COST OF PRODUCTIONTwo sources

of obtaining shrimp

Captured(Marine breeds)

Cultured(Fresh water breeds)

purchasing boats, trawlers, nets etc.

sophisticated equipments along with feed and medicine

INTERNATIONAL PRICES OF SHRIMP

*Source: www. http//:infofish/global trade.pdf

…CONTD

*Source: www. http//:infofish/global trade.pdf

*Source: info fish trade news

INTERNATIONAL PRICE (USD/Kg)TREND OF FROZEN SHRIMP OF INDIAN ORIGIN

NEXT MAJOR DESTINATION FOR SHRIMP EXPORT??

Declining trends in shrimp export from India to USA

Accounted for only 19% of exports in 2007-08 Vs 41% in 2003-04

Anti-Dumping measures against shrimp produced in India since 2004

Declined shrimp export from 27% (2004) to 22% (2007)- due to a weaker Japanese economy

*Source: Fis-World news 18th August 2008

European UnionTHE NEXT DESTINATION FOR

SHRIMP EXPORT !!

EU as a DESTINATION FOR SHRIMP EXPORT

•Distribution channels for the concerned product

• Product requirements/standards• Packaging, marking, labeling of retail package.• The customs tariffs for the concerned product• Availability of insurance.


• Distribution channels for the concerned product

•Product requirements/ standards

• Packaging, marking, labeling of retail package.

• The customs tariffs for the concerned product• Availability of insurance.

PRODUCT STANDARDS

*Source: EEC directives and procedures for import of fish and fishery products 2008

Directive 91 Annexure 493 laid down the rules for product and production standards.

The focus is on production related safety aspects of shrimp products from developing nations to European Union.


The major issues regarding safety norms of fishery products like frozen and non-frozen shrimps is the presence of harmful microbes and presence of chemicals in quantity which may render the product harmful for human consumption.

1.Conditions concerning parasites: During production and before they are released for human consumption, fish and fish (shrimp) products must be subject to a visual inspection for the purpose of detecting and removing any parasites that are visible.


2. Conditions concerning freezing temperature: The frozen shrimps are to be maintained at a temperature of not more than -20 0 C. in all parts of the product for not less than 24 hours. Products subjected to this freezing process must be either raw or finished.

3. In accordance of Council Regulation (EEC) no 103/76 (last amended in 2006) the fishery products must undergo certain critical checks. Organoleptic contents inspection in the shrimp is thus a critical standard


4. Article 15 under this directive also laid down the norm for parasitic content checks in the fishery (shrimp) product.

5. Chemical content analysis is also a necessary parameter laid down by this directive. Wherein samples are to be tested for controlling the level of certain chemical components like:TVB-N (Total Volatile Basic Nitrogen) and TMA-N (Trimethylamine-Nitrogen)Histamine : the mean value must not exceed 100 ppm


6. Article 15 is also concerned with the concentration of contaminants in the water in which the shrimps are cultured.

Imported shrimps must not contain in their edible parts contaminants present in the aquatic environment such as heavy metals and organo-chlorinated substances at such a level that the calculated dietary intake exceeds the acceptable daily or weekly intake for humans.

• Distribution channels for the concerned product• Product requirements/standards

•Packaging, marking, labeling of retail package.

• The customs tariffs for the concerned product• Availability of insurance.


PACKAGING REQUIREMENTS

Packaging of fishery products have drawn WTO’s attention way early in 1990.

Thus the “Export Packaging Note No. 36” was developed and is adopted and under implementation in EU.

The various heads under which the packaging must be adapted to be environmentally safe.

Source reductionUse of less/fewer raw materials, especially non-renewable materials by making packages smaller and light and by material substitutions.

Energy requirementsUse of packaging materials and methods, which minimize energy consumption.

Potential for reusePackaging designed and constructed for multiple usage.

Potential for recyclingPackaging from which the materials can be recovered for reuse as packaging orsecondary applications.

Ease of disposalPackaging, which can be readily disposed of after use with minimal environmental impacts.

Air, water and ground pollutionUse of packaging materials and methods, which minimize pollution during all stages of production and use, as well as at final disposal.

LABELLING SPECIFICATIONS (FISHERY PRODUCTS)

*Source: http://exporthelp.europa.eu/

• In accordance with the Regulation (EC) 104/2000 (OJ L-17 21/01/2000) and Regulation (EC) 2065/2001 (OJ L-278 23/10/2000), the following information must be provided on the labeling or packaging of the fishery product, or by means of a commercial document accompanying the goods:

1. Commercial and scientific designation of the species: For this purpose, Member States publish a list of the commercial designations accepted in its territory.

LABELLING SPECIFICATIONS (FISHERY PRODUCTS)


2. Production method (caught at sea or in freshwater, or resulted from aquaculture) indicated by the harmonised terminology

3. Catch area:

– Caught at sea: one of the areas mentioned in the Annex to the Regulation 2065/2001;

– Caught in freshwater: reference to the country of origin;

– Aquaculture: reference to the country in which the product is farmed

LABELLING SPECIFICATIONS (SHRIMPS)• The labels of products subject to harmonised

marketing standards established by Regulation (EC) 2406/96 (OJ L-334 23/12/1996) should include the following details:

• Country of origin in Roman letters at least 20 mm high

• Scientific name and trade name • Presentation • Freshness and size categories • Net weight in kilograms • Date of grading and date of dispatch • Name and address of consignor


LABELLING SPECIFICATIONS (SHRIMPS)• Lots must contain products of the same size and

uniform freshness. The freshness category, size category and presentation must be clearly and indelible marked, in characters of at least 5 cm high, on labels affixed to the lot.

• The information provided by labels must be easy to understand, easily visible, clearly legible and indelible and must appear in the

official language(s) of the Member State where the product is marketed.



• Product requirements/standards• Packaging, marking, labeling of retail

package.

•The customs tariffs for the concerned product

• Availability of insurance


TARIFF AND DUTIES (TARIC)• Simulation date : 03/09/2008• TARIC code 0306135000 (CRUSTACEAN FROZEN OR NON-

FROZEN)

• Country of origin/destination India - IN (664)

• No restrictions Import• Third country duty: 12.00% • Non preferential tariff quota : 0 % • End date 31/12/2008 • Tariff preference (SPGL): 4.20 % • Documents required: (C 623) Transhipment

certificate EXP.1

*Source: http://ec.europa.eu/taxation_customs


• Product requirements/standards• Packaging, marking, labeling of retail

package.• The customs tariffs for the concerned product

•Availability of insurance


AVAILABILITY OF INSURANCE The insurance policies are categorized under 1.Insurance covering loss of consignment

during shipping (damages, theft etc.)2.Insurance covering credit risk.

ECGC is the agency which provides insurance cover against credit risk

ECGC AND CREDIT INSURANCECredit Insurance Policies:

1.SCR or Standard Policy includes:

a.Commercial Risks: Insolvency of the buyer. Failure of the buyer to make the payment due

within a specified period, normally four months from the due date.

Buyer's failure to accept the goods, subject to certain conditions.

b. Political Risks: Imposition of restriction by the Government of the

buyer's country.War, civil war, revolution or civil disturbances in

the buyer's country. New import restrictions or cancellation of a valid

import license in the buyer's country. Interruption or diversion of voyage outside India

resulting in payment of additional freight or insurance charges which can not be recovered from the buyer.

Any other cause of loss occurring outside India not normally insured by general insurers, and beyond the control of both the exporter and the buyer.

TRADE POLICY REGULATIONSThe HS code for frozen shrimp is 030613

and that of non-frozen is 030623.

There is no separate trade policy or procedure for fishery (shrimp) export from our country.

Nevertheless, there are certain Duty Exemption Schemes applicable under specified products.

*Source: http://ec.europa.eu/taxation_customs

CODEX ALIMENTARIUS NORMSThe Codex Alimentarius Commission was

created in 1963 by FAO and WHO.The main purposes of this Programme are

protecting health of the consumers and ensuring fair trade practices in the food trade.

Codex code for Shrimp products are as follows:

Reference NumberYear of

adoptionTitle Revision Year Amendment Year

CODEXSTAN 37 1991

Standard for Canned

Shrimps or Prawns

1 1995 NIL

CODEXSTAN 92 1981

Standard for Quick Frozen Shrimps or

Prawns

1 1995 NIL

*Source:codexalimentarius.net

SWOT ANALYSIS OF INDIAN SHRIMP EXPORT TO EUROPEAN UNION

OPPORTUNITIES:

EU is an emerging market for Indian fishery products. The exchange rate of € is gaining strength vis-à-vis US$. Distance of EU countries form India.

THREATS:

The competitors are also targeting this market.Quality control norms are very stringent.

WEAKNESS: Technology lag Quality control in production not upto the mark Cold chain in logistics is not well developed Inadequate sea and airport infrastructure to handle export of frozen shrimps

STRENGTH:

India is major exporter Cost competitive. Training and development initiatives. (CMFRI, CIFA,CIFT, CICRI, CIBA) Export subsidies (DEPB, DES etc.)

MARKET DEVELOPMENT STRATEGIESProduction of shrimps should be

consolidated.Reducing distance of processing plants from

the place of production.Developing cold chain.Stringent quality control during production

and transportation.Hiring overseas agents

MARKET DEVELOPMENT STRATEGIESBranding not only labelingOrganically produced shrimps.Business analysis of an EOU for processed

shrimp.

COMPETITOR ANALYSIS

COMPARISON OF EXPORT OF INDIA AND THAILAND

Countries studied:1.USA 2.Ukrain 3.UK 4.UAE 5.Russia 6.New Zealand 7.Germany 8.France 9.Canada 10.Baharain 11.Australia

*Source: commerce.nic.in*Source: customs.go.th

OPPORTUNITIES:

Newer market opening up in EU and Gulf.

THREATS:

Competitors like India and Bangladesh.

WEAKNESS:

Declining sales in the Japanese market. Shifting of shrimp farms to “tilapia” cultivation.

STRENGTH: Highest producer. Highest density of shrimp farms/ unit

area Nearness to Japan. Advanced technology. Easy access to finance. Member of trade guild (ASEAN).

MAIN COMPETITOR’S SWOT

QUALITY MANAGEMENT FOR EXPORTS : DISEASE MANAGEMENTPRESENCE OF PATHOGEN IN DISEASED SHRIMP

RENDERS IT NON EXPORTABLE DUE TO STRINGENT SANITARY MEASURES IN INTERNATIONAL MARKET.

SOME OF THE DISEASES WHICH AFFECT SHRIMP ARE:

1. Monodon Baculovirus Disease (MBV)2. Hepatopancreatic Parvo-like Virus (HPV) Disease3. Yellow-head Disease (YHD)4. Luminous Vibriosis5. Black Gill Disease6. Soft-shell syndrome

QUALITY MANAGEMENT FOR EXPORTS : HARVESTING

Has to be harvested in good condition within a short period of time.

Harvesting technique should not damage or excessively contaminate the shrimp with waste.

Rapid harvesting will reduces risk of bacterial contamination and the shrimp will still be fresh when reaching the processor.

Complete harvesting can be carried out by draining the pond water through a bag net and hand picking.

The average culture period required is around 120-150 days during which time the prawns will grow to 20-30 gm size (depending on the species).

QUALITY MANAGEMENT FOR EXPORTS: PROCESSING

Removal of off-flavor from shrimp[Smoking, steam pre-cooking and addition of vegetable oil before

canning]

Evaluating freshness of shrimp[Organoleptic, chemical (estimation of TVBN and VAN) and

microbiological methods]

Preparation of shrimps for processing[Peeling (manual and enzymatic), deveining, washing, different

forms of preparation - shell-on, headless, PD, PDC, etc]

Year 2007 2008

Capital cost 207500

Recurring cost 108075 118883

Total cost 315575 118883

Income 182070 277200

Net profit -133505 24813

BCR 1.05711

*Source: http:\\ nic.up.innovtn2007

figures are in Rupees

FINANCIAL ANALYSIS OF CULTURED SHRIMP (at 2007 prices)

•This calculation is based on an operational unit of 7500 cubic meter pond.

•The crop cycle is once in a year.

•Income covering the cost takes two seasons. Thus the breakeven period is two seasons or one and a half year.

*Research conducted by trade knowledge network: www.tradeknowledgenetwork.net

COST OF CATCHING SHRIMP AT SEA(at 2007 prices)

Cost elements

Qty X Price (Rs.)

Total cost(in Rs.)

Diesel 2100 litres x 28 58800

Ice 12 tonnes x 750 9000

Food 2000

Spares 5000

Net repairs 2000

Total cost for a 4

day trip for 5 fishermen

76800

•These figures pertains to fishing in sea.

•The data is collected by a field survey conducted in Tamil Nadu by an international organisation

IN VOLUME

US AVERSE OF INDIAN SHRIMP??

IN VALUE

*Source: globefish.org/market news/shrimp

DECLINING MARKET IN JAPAN - A FEW FIGURES

*Source: globefish.org/market news/shrimp

shrimp export

Business

fish shrimp products

sourcesofobtaining shrimp

declined shrimp export

source fao data

international prices

shrimp cultivation guideline

production standards

product standards