This Sector Is Set For A Shrimp-tastic Comeback In 2025
Betting on glimmery gold and exciting themes to grow in the coming year is one thing. A shelly sector in the sea is set to shell out some solid growth, going by analysts' observations.
India's shrimp industry is poised for a strong comeback in the next year on the back of recovering global demand and reduced competition from Ecuador, according to a report by InCred Equities. The country whose overproduction led to industry consolidation has now slowed down according to the report. Now, this growth will also be supported by favourable market conditions. The US and China are depleting shrimp inventories, while input costs like fishmeal and soymeal are declining.
These changes make just enough space for India to gain share in the shrimp market. India's shrimp imports to the US have accelerated to over 40% in September and October this year, displaying its growing dominance in the global market.
Ecuador's shrimp industry, heavily supported by the former government, revved up production to unsustainable levels, exceeding global demand. This oversupply, paired with the withdrawal of subsidies, has forced the Ecuadorian industry into a period of consolidation.
As the global demand for shrimp recovers and Ecuador's production slows, India is poised ride this wave of market gap into boosted growth.
A structural downtrend in major input commodities such as feed and fuel is further expected to boost the industry in 2025.
Indian Shrimp Not Out Of Rough Waters
The US Department of Commerce had unexpectedly announced an antidumping duty on frozen warmwater shrimp imports from Ecuador, India, Vietnam, and Indonesia earlier this year.
While Ecuador seems the hardest hit from the duty from the preliminary determination of countervailing duty, Indian shrimp exporters will likely need to book additional costs due to it, especially for sales completed over the past six months, InCred had said in an November note.
The impact will potentially appear in the December quarter financial results, it had said.
Ecuador holds a competitive advantage over Indian companies regarding countervailing duties, which may affect market positioning and profitability for Indian exporters.
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