Kisan Sabha – Page 21 – हर कदम हर डगर, आपका हमसफर

Uttar Pradesh surpasses Maharashtra in sugar production this season

Synopsis

“The total sugar produced by Uttar Pradesh in sugar season 2022-2023 is 107.29 lakh tonnes (which includes 3.05 lakh tonnes of Khandsari (physically extracted sugar from liquid jaggery), as compared to 105.30 lakh tonnes by Maharashtra. The area under cane cultivation in Uttar Pradesh is 28.53 lakh hectare (maximum in India) as compared to 14.87 lakh hectare in Maharashtra,” said UP’s Cane Development and Sugar Mills’ minister Laxmi Narayan Chaudhary.

Uttar Pradesh has surpassed Maharashtra in sugar production in the current season even as 118 sugar mills operated in UP during the period compared to 210 mills that were operational in the western state. UP’s Cane Development and Sugar Mills’ minister Laxmi Narayan Chaudhary told PTI, “UP is ahead of Maharashtra as far as production of sugar is concerned along with a number of other factors.”

Elaborating further, Chaudhary said, “The total sugar produced by Uttar Pradesh in sugar season 2022-2023 is 107.29 lakh tonnes (which includes 3.05 lakh tonnes of Khandsari (physically extracted sugar from liquid jaggery), as compared to 105.30 lakh tonnes by Maharashtra. The area under cane cultivation in Uttar Pradesh is 28.53 lakh hectare (maximum in India) as compared to 14.87 lakh hectare in Maharashtra.”

The sugarcane crushing season runs from October to June.

“The sugarcane production in UP has been 2,348 lakh tonnes, while in Maharashtra it was 1,413 lakh tonnes,” Chaudhary said.

He added that total cane crushed by sugar mills in UP in the 2022-2023 season was 1,084.57 lakh tonnes, whereas it was 1,053 lakh tonnes in Maharashtra.

The UP minister also informed that 19.84 lakh tonnes of sugar was diverted to ethanol in Uttar Pradesh, while in Maharashtra, it was 15.70 lakh tonnes.

Pointing towards the number of installed sugar mills in both the states, the UP minister said that as compared to 246 installed sugar mills in Maharashtra, there are 157 installed sugar mills in UP.

As many as 210 sugar mills operated in Maharashtra as compared to 118 in Uttar Pradesh, he said.

He added that in the 2022-23 season, a payment of Rs 28,494.32 crore has been made to the farmers, and there are about 80 sugar mills, which have made 100 per cent payment within a week of closure.

“Under Chief Minister Yogi Adityanath jee, in the last six years, the sugarmills have made a payment of Rs 2,11,700 crore (to the farmers). In the tenure of the previous governments, 12 sugar mills were sold, while 18 sugar mills were shut down. After coming to power, we have opened new mills and increased the capacity of some mills,” Chaudhary said.

Sharpening his attack on the previous governments, Chaudhary said, “The payment made to cane farmers during the Bahujan Samaj Party regime (from 2007 to 2012) was Rs 93,000 crore, while in the Samajwadi Party government (from 2012 to 2017), it was about Rs 95,215 crore.”

The cane development minister said that the UP farmers’ earnings from all other crops is almost equal to the amount they get in their bank account by selling just sugarcane.

He also said that instructions have been issued to the sugar mills to remain operational till June 15.

Meanwhile, when contacted, Maharashtra’s Cooperation Minister Atul Moreshwar Save told PTI, “The production of sugarcane this year was less, so less amount of sugarcane reached the sugar mills as compared to last year, and hence there is the difference. However, next year, the capacity (of the sugar mills) will increase.”

Agritech’s role in enabling climate-resilient agriculture

Global warming and climate change has been a part of numerous discussions presided by world leaders over the past decades. It is a pressing problem and has almost become, unfortunately, a passé but still deserves our careful consideration. Human activities add to the lion’s share of CO2 emissions – with recent studies showing as much as 48 per cent increase in carbon dioxide since pre-industrial levels. The main culprits include deforestation, reliance on fossil fuels and farming livestock. One lesser-known victim of this global crisis is agriculture.

Why is climate-resilient agriculture necessary?

Due to the ongoing threat posed by global warming, its effects will have far-reaching effects that may not be immediately obvious but may become apparent in the ensuing decades. One of them is the security of food.

Food security is a global issue that has recently come up in discussions due to supply chain stress brought on by the ongoing conflict between Russia and Ukraine. But climatic issues will pose a greater threat in the future and may cause food insecurity, leaving aside geopolitical ones. The scenario will lead to higher food prices but with lower output due to the unchecked heat waves impacting crop yields globally.

Increased stress on livestock brought on by the rising temperatures will also have an impact on the world’s food supply. The FAO (Food and Agriculture Organization of the United Nations) predicted in 2015 that the global food demand could rise by more than 60% by 2050, placing additional stress on the already vulnerable food supply chain due to climate change.

Tech-driven countermeasure to enable climate-resilient agriculture

Climate change is happening and taking a proactive as well as a concerted effort is the only way to deal with this global phenomenon. A sustainable take on agricultural operations is one key approach to countering or mitigating the effects of climate change on our food supply.

When we talk about sustainability in farming, it is in relation to a more data-driven strategy backed by research. Precision farming is a broad word that refers to a way of thinking about farming operations that uses data gathered from sensors, satellite images, artificial intelligence (AI), the internet of things (IoT), drones, and automation, among other sources, to help with decision-making.

This can immediately lead to greater quality and quantity of harvests while reducing farm input costs and agriculture’s overall impact on the environment through decreased utilisation of fertilisers and pesticides.

Precision farming tools

The IoT sensors and other supporting technologies like drones, GIS (Geographic Information System), and NDVI (Normalised Difference Vegetation Index) that aid in gathering, measuring, analysing, and storing real-time farm metrics are one of the major frameworks that enable precision farming at scale. Farmers are able to produce better yields with the help of IoT systems, which also improves food security and safety as a byproduct. The data-driven approach also allows room for better traceability within food production and farm management. The ability to monitor the entire supply chain leads to greater savings and larger profits for the farmers, making it a win-win situation for both the producers and the consumers.

Complementing precision farming are technologies like Variable-rate Technology (VRT) which allows for precise and controlled use of water, natural resources and farm inputs based on zone-specific deficiencies informed by farm-level data. This helps in minimising the wastage of precious resources and lowering the usage of fertilisers and pesticides leading to reduced emission of greenhouse gases and contamination of soil and water bodies.

Early disease prediction and local weather forecast also come with the territory of precision farming, empowering farmers to take preventive measures against climate change well in advance and further increasing their farming productivity and profitability.

Climate-resilient agriculture – A sustainable future

Climate change is not just our problem but everyone’s problem. We have the tech to make our food supply chain more resilient against potential threats like rising temperatures and erratic weather patterns brought by climate change.

Precision farming is already part of the agricultural ecosystem but just not at scale. Mass adoption will only come, especially in developing nations like India, if the tech is affordable and accessible to farmers with small land holdings. Numerous startups are already tackling this problem by creating agritech solutions that take cost and form factors into consideration. The average luddite farmer needs to get educated, and a local pool of experts and systematic knowledge transfer of these technologies via government initiatives and agri institutions are essential.

Representation to Finance Minister for inclusion of Agrochemicals under Production Linked Incentive (PLI) Scheme

Crop Care Federation of India submitted a detailed proposal to the Ministry of Chemicals & Fertilizers in 2020 for the inclusion of Agrochemicals under the Production Linked Incentive Scheme (PLI) post stakeholder consultation.

Recently, the Industry body has made a representation to the Finance Minister seeking her intervention citing several issues which are plaguing Indian manufacturers. The situation has become alarming due to a surge in agrochemical imports, majorly readymade pesticide formulations by traders who clandestinely importing not for their captive consumption but for merchant sale, which is not officially permissible.

The imports of agrochemicals have increased by 65% from Rs. 9,096 crores (2019-20) to Rs. 15,000 crores (est.) during 2022-23. Interestingly 55% of these are readymade formulations requiring no value addition or any capital investment.

Trade Surplus of Rs. 30,000 crores

Briefing the media Mr. Harish Mehta, Senior Advisor CCFI said “Whenever Indian manufacturers have produced molecules that were previously imported by MNCs, price reduction has been between 50-80%. The importers make huge profits from these imported formulations causing unnecessary burdens on the foreign exchange outgo. Agrochemical is one of those sectors where there is a Trade Surplus of Rs. 30,000 crores (2022-23).”

CCFI has further assured the Finance Minister that Indian manufacturers plan to invest more than 12,000 crores in the next 3 years provided the proposal is implemented as per industry recommendation.

The detailed dossier submitted has 35 intermediates in terms of their market size, potential and future growth. It had a listing of 81 technicals imported majorly by MNCs, including about 31 technicals being imported despite having indigenous manufacturing capacities.

“Lastly of concern are 89 readymade formulations being imported which can be manufactured in India. CCFI members are of the firm view that there should be a delta of 10% between the custom duty on the import of technical and formulation. This would be a deterrent to reduce imports and encourage indigenous manufacturing in their expansion plans and future fresh investment” said Mr. Harish Mehta.

Govt scraps import duty, agri cess on soya bean oil, sunflower oil imports under TRQ

This waiver will be effective from 11 May to 30 June, 2023, and applies exclusively to importers holding a TRQ license for the 2022-23 fiscal year

The finance ministry has announced a waiver of basic customs duty and agriculture infrastructure and development cess on crude soya bean oil and sunflower seed oil imports under the tariff rate quota (TRQ) system. This waiver will be effective from 11 May to 30 June, 2023, and applies exclusively to importers holding a TRQ license for the 2022-23 fiscal year.

TRQ is a system allowing a specified volume of imports into India at a reduced or zero-duty rate, with normal tariffs applying to additional imports once the quota is reached. In May 2022, the government invited applications for a 2 million-tonne TRQ allocation for both the 2022-23 and 2023-24 fiscal years. However, due to a surge in sunflower oil and soya bean oil production, the TRQ allocation was withdrawn for FY 2023-24.

“To control the domestic prices and ensure farmers‘ interest amid a steep fall in prices globally the prices, it seems to be an encouraging move,” said Ankur Gupta, practice leader, indirect tax at SW India, a tax advisory firm.

“However, to allow the importers to utilize the allocated TRQ, the Government has extended the timeline for the importers who have allocated TRQ for FY 2022-23 till Jun 30. Once the TRQs have been utilized, the exemption would be withdrawn, and the focus will be to utilize the domestic production and support the farmers who have excess production lying with them with remunerative prices for their crop,” Gupta added. “Once the exemption is withdrawn, we might see a slight increase in the prices of these products as the customs duty could be in the range of 5% to 20%.”

In March, the government decided to discontinue imports of crude sunflower seed oil under TRQ from 1 April this year and said no TRQs would be allocated for import of crude sunflower seed oil in 2023-24.

A similar decision was taken for crude soya bean oil in January this year. The duty-free import of 2 million tonnes (MT) per year was applicable earlier for 2022-23 and 2023-24 financial years for crude sunflower seed oil and crude soyoil. For crude sunflower oil, the TRQ was in place till 30 June this year.

Despite the order, the customs authority has reportedly not allowed to discharge the cargo arrived under the TRQ at zero duty since 1 April 2023. “This will now facilitate clearance of cargo presently lying at various ports under bond storage and the cargos which are under voyage,” said B. V. Mehta, executive director of Solvent Extractors’ Association of India.

Growing for the future! Discussing the untapped potential of India’s horticulture sector

Synopsis

India is the second-largest producer of horticultural products but enjoys a share of less than 2% as compared to the related world trade.

The Economic Times, in association with Bayer and Knowledge Partner Grant Thornton Bharat, conducted the India Horticulture Future Forum 2023. Herein, subject matter experts, policymakers, industry leaders and representatives of multi-lateral development organisations, as well as farmer representatives in horticulture, deliberated on a range of necessary interventions in the sector. A summary of the event is captured below:

In the Indian agricultural and allied sector, over three crore farmers grow horticulture crops for at least one season a year on over 30 million hectares of land. Evidently, there is a scope to greatly enhance production, given the importance of horticulture in terms of nutritional security, enhancing farmers’ income and increasing the contribution of the overall agriculture sector to the gross national product (GNP).

India is the second-largest producer of horticultural products but enjoys a share of less than 2% as compared to the related world trade. Even today, India is a net importer of fruits and vegetables. Thus, there is scope for India to ramp up horticulture production, targeting increased domestic demand as well as global demand. Many horticulture commodities are protected by tariff walls of up to 40%. There is a need to convert seasonal comparative advantage to year-round competitive advantage. Moreover, production and productivity, post-harvest and processing, market intelligence, marketing and logistics and export-related constraints require to be redressed.

Some of the critical constraints confronting the horticulture sector and necessary interventions may be viewed as follows:
Production: Farming practices since the green revolution have affected soil and water health. There is less focus on soil health management due to the urea-centric production approach, which also leads to nutrition deficiency. India uses 66% more fertiliser per hectare compared to the USA. The use of bio-stimulants is also barely two kg per hectare or 4% of that in Brazil, which has demonstrated commodity-export-led growth. In addition, the dearth of adequate inputs like seeds and planting materials and crop protection products has affected yield. Furthermore, irrigation and credit constraints affecting the application of technology in farming, including in mechanisation, are other smallholder farmers’ limitations. Moreover, the scale of government intervention is marginal compared to the needs of the sector. In this context, private sector participation is vital. For instance, the private sector can play a huge role in improving the availability of quality planting material and help in digitisation and agtech services. It can also provide solutions to farmers around crop advisory, purchase of inputs and mechanisation and fulfilment of credit needs at scale. Propagation of micro irrigation and watershed management systems is also key. Farmer producer organisations (FPOs) may also serve as facilitator platforms for the widespread delivery of services.

Post-harvest and processing: There is a limited post-harvest facility in India, and cold storage is limited mostly to potatoes. Though presently, significant commitment and investment are made by the Government of India in developing storage infrastructure through a range of schemes. With new agtech, automation of activities in warehousing and logistics is also taking place.

There is a research and development (R&D) shortfall in processable horticulture varieties. Presently, the capacity utilisation of processing facilities in the country is also only to the tune of 25 to 30%. Supply-related security of processable varieties throughout the year is required to encourage investment in processing facilities and infrastructure. This implies that in order to extend storage life, post-harvest infrastructure is key. The packaging ecosystem needs to be developed, and post-harvest nutrition losses also need to be targeted.

Market intelligence: India is constantly facing gluts and scarcity of horticultural crops every other year. Market intelligence in advance on supply, demand and prices is critical for production planning by farmers, and related systems need to be developed as well. FPOs may also be developed as aggregation platforms.

Exports: Indian horticulture products are facing tariff walls in developed countries, along with non-tariff, phytosanitary requirement-related barriers. Quality produce, conformance, aptly exploiting free trade agreements (FTAs), sea protocols and traceability systems are important to promote fruits and vegetables in the international market. Development of post-harvest and logistics infrastructure to facilitate the evacuation of marketable surplus is also key to helping farmers avoid resorting to distress sales during harvest.

Agtech: The supply and demand side of agtech services needs to be developed. These range from drones to financial services providing platforms. Other emerging technologies are irrigation management through Internet of Things (IoT) devices and pest, disease and soil management through artificial intelligence (AI) models.

The forum concluded with a resolution to evolve an Indian horticulture consortium representing leading stakeholders. Six working groups are to be constituted addressing:

Inputs: Availability and access to quality planting material, crop protection solutions, farm mechanisation, etc.
Digitech: Advisory services, traceability, etc.
Logistics: Supply chain effectiveness systems and market-linked post-harvest storage
Finance: Access to credit and insurance
Marketing and exports: Orienting FTAs, market intelligence and ensuring conformance
Processing: Incentivising value-addition

A cluster value-chain-based approach is being progressively adopted by the government, which will be adopted to take Indian horticulture to its deserving world market leadership position.

Drone Technology Evolving The Agriculture

Drones are being used in practically every sector of the economy, but the agricultural industry is exploding. According to some estimates, the agricultural drone market will expand from $1.2 billion in 2019 to $4.8 billion in 2024. Drone use on large and small size farms will become increasingly common in the next years, from reconnaissance to security. The information obtained by drones on farms is typically used to better influence agronomic decisions and is part of a system often referred to as ‘precision agriculture’.

Drones have already become an integral feature of large-scale precision farming operations in many places. The data obtained by drones recording fields helps farmers plan their planting and treatments to maximise harvests. According to some statistics, adopting precision farming technology can raise yields by up to 5%, which is a significant increase in an industry with generally thin profit margins.

In this article, we will look at some of the areas where drone technologies are already being utilised on farms, as well as some new agricultural drone technologies that are being investigated, as well as some of the steps and hurdles to mainstream drone use in agriculture.

Plant health monitoring and scouting

Plant health monitoring is one application for drone imaging that has already been widely used with remarkable effectiveness. Drones equipped with unique imaging equipment called Normalized Difference Vegetation Index (NDVI) employ detailed colour information to determine plant health. This enables farmers to keep an eye on crops as they develop so that any issues can be resolved quickly enough to save the plants.

Monitoring Field Conditions

The health of the soil and agricultural conditions are also being tracked through drone field

monitoring. Drones may deliver precise field mapping with elevation data, enabling producers to identify any anomalies in the area. Knowing the field elevation helps with drainage patterns and wet/dry patches, which enables more effective watering tactics. Using improved sensors, several agricultural drone sellers and service providers also provide soil nitrogen level monitoring. This enables nutrients to be applied precisely, reducing bad growing areas and enhancing soil health for many years.

Planting and Seeding

Seed planting is one of the more recent and less popular uses of drones in agriculture. Currently, automated drone seeders are largely utilised in the forestry sector, but a more broad application may be on the future. Drone planting makes it possible to replant inaccessible locations without putting workers in danger. With a team of two operators and ten drones that can plant 400,000 trees per day, they are also able to plant much more effectively.

Drone Pollination

Some of the more recent drone applications in farming are still in the testing and development stages. One of the most known (and frequently dramatized) uses is pollination drone technology. Researchers in the Netherlands and Japan are developing small drones that are capable of pollinating plants without damaging them. The next step is to create autonomous pollinating drones that will work and monitor crop health without constant instruction from operators.

Drone Irrigation

New research out of Australia is also creating exciting opportunities for drone use in agriculture. As climate change increasingly affects drought conditions, creating more efficient irrigation solutions is vital. Using microwave sensing, drones are able to capture very accurate soil health information including moisture levels without the plants getting in the way. This means water can be distributed in a field in the most efficient way in an effort to conserve resources.

Conclusion

Drones have already vastly altered the agricultural industry and will continue to grow in the coming years. Even though small farmers are finding drone use to be more beneficial, there is still a long way to go before drones are a standard piece of farming equipment, especially in developing countries. In many nations, there is a need to create or update laws governing drone use, and more study is needed to determine whether they are useful for applying and spraying pesticides, for example. There are various ways drones can be useful to farmers but it is crucial to understand their limitations and uses before investing in expensive equipment.

MoS Agri pitches for mass adoption of new farm technologies for achieving $5 trillion economy

Synopsis

Kailash Choudhary, Minister of State for Agriculture, believes that mass adoption of new technologies like drones, artificial intelligence (AI), and precision farming in the agriculture sector is necessary for India to reach the USD 5 trillion economy. Choudhary also urged scientists to identify untapped areas such as rain-fed districts, empowering farmers with new agricultural technologies. 6-7%.

Minister of State for Agriculture Kailash Choudhary on Friday said mass adoption of new technologies like drones, artificial intelligence (AI) and precision farming in the agriculture sector is essential for India to achieve USD 5 trillion economy milestone. “… we need to leverage new technologies, such as drones, AI, precision farming, blockchain in farming to achieve Prime Minister Narendra Modi’s near future target of USD 5 trillion economy,” the minister said while addressing an event organised by agro-chemical firm Dhanuka Group.

Choudhary also urged scientists to identify untapped areas, such as rain-fed districts to increase agriculture production substantially by empowering farmers with new agri technologies.

“The potential of most of the agri-land in the country has been exhausted, only the area dependant on rains is left whose potential needs to be tapped,” he said in a statement.

Making a strong pitch for genetically modified (GM) crops, Deepak Pental, former Vice Chancellor, University of Delhi said, “The USA has increased agriculture production by 35 per cent by introducing GM crops long back, whereas Europe just managed 6-7 per cent.

“The population in Europe is anyways not increasing, so they have the option, but do we have option? So, we need to decide which side of divide we want to be!”

Pental, favouring the use of agro-chemicals, said that high-quality agro-chemicals are essential to reduce the damage to crops.

Dhanuka Group Chairman R G Agarwal said, “The government’s forward looking policies towards new technologies and swift approvals for agriculture sector, clearance to drone guidelines being an example, are paving the way for Indian being food bowl for the world by 2047.”

Area under summer crops down marginally

Synopsis

The area has been reported mainly from the states of Madhya Pradesh, Bihar, Tamil Nadu, Uttar Pradesh, West Bengal and Gujarat. For Shri Anna and nutri and course cereals about 11.73 lakh ha area coverage has been reported compared to 11.30 lakh ha during the corresponding period of last year with Gujarat, Uttar Pradesh and West Bengal being the top three states.

The sowing of summer crops is marginally down at 69.20 lakh hectares this year as against 70.30 lakh hectares during the same period last year, according to the latest data released by the agriculture ministry data.

The sowing area under pulses and coarse cereals is higher year-on-year, while the acreage of rice and oilseeds is lower, according to the data.

About 19.61 lakh ha area coverage has been reported under pulses compared to 18.44 lakh ha during the corresponding period of last year.

The area has been reported mainly from the states of Madhya Pradesh, Bihar, Tamil Nadu, Uttar Pradesh, West Bengal and Gujarat.

For Shri Anna and nutri and course cereals about 11.73 lakh ha area coverage has been reported compared to 11.30 lakh ha during the corresponding period of last year with Gujarat, Uttar Pradesh and West Bengal being the top three states.

About 27.89 lakh ha area coverage under summer rice has been reported as compared to 29.80 lakh ha during the corresponding period of last year while that of oileeds is 96 lakh ha area this year compared to 10.85 lakh ha last year.

The agriculture ministry has set a target of a record 332 million tonnes production of foodgrains for the year 2023-24 as against the latest estimate of 323. 5 million tonnes produced the previous year.

Fertiliser flying squads to crack down on diversion of agriculture-grade urea

Synopsis

The squad has registered 30 first information reports for diversion of urea, seizing 70,000 bags of the agrochemical. Around 11 persons have been jailed under the Prevention of Black Marketing and Maintenance of Supplies Act. The Centre provides urea at a highly subsidised rate of ₹266 per bag (of 45 kg) to farmers. It has to bear a subsidy of about ₹2,500 per bag.

The Centre has launched a nationwide crackdown to curb diversion of agriculture-grade urea. for industrial uses that results in subsidy leakage.

It has constituted fertiliser flying squads which have conducted more than 370 surprise inspections across 15 states to check for spurious or substandard mixture units, single superphosphate (SSP) units and NPK(nitrogen, phosphorus, potassium) units.

The squad has registered 30 first information reports for diversion of urea, seizing 70,000 bags of the agrochemical.

Around 11 persons have been jailed under the Prevention of Black Marketing and Maintenance of Supplies Act.

The Centre provides urea at a highly subsidised rate of ₹266 per bag (of 45 kg) to farmers. It has to bear a subsidy of about ₹2,500 per bag.

Any illegal diversion of this highly subsidised urea meant for the farmers and agriculture for non-agriculture or industrial purposes by many private entities results in shortage of urea meant for farmers and subsidy burden on the government.

India’s shrimp sector to see 5% growth in 2024: CRISIL

Synopsis

Debt to be contracted for part-funding such as capex and incremental working capital requirements will be comfortably absorbed by the strong balance sheets of the players. An analysis of 98 shrimp exporters rated by CRISIL Ratings, accounting for two-thirds of the industry revenue, indicates as much.

India’s shrimp sector will see revenue grow 5% on-year in fiscal 2024, driven by increasing demand from China, which will shore up exports to a near lifetime high of ~$5.3 billion seen in fiscal 2022, according to CRISIL Ratings.

This growth will largely be volume-driven, allowing the operating margin to bounce back to ~7.5%, as costs soften. Better demand will prompt shrimp processors to expand their capacities. Debt to be contracted for part-funding such as capex and incremental working capital requirements will be comfortably absorbed by the strong balance sheets of the players. An analysis of 98 shrimp exporters rated by CRISIL Ratings, accounting for two-thirds of the industry revenue, indicates as much.

For the record, India, Ecuador, and Vietnam are the top three suppliers of shrimp, while the US, the EU, and China are the top three consumers. India supplies 70% of its produce to these three regions. In fiscal 2023, Indian shrimp players got battered on three fronts — first, extreme heat waves reduced produce; second, shortage of containers and higher logistics costs dented exports to the US and EU; and third, exports to China remained muted amid continued lockdowns there.

This has led to Ecuador, one of India’s major competitors, seizing the lead in shrimp exports. Riding on the cost-competitiveness afforded by its relative proximity to the US and EU, Ecuador could supply the produce earmarked for China into the two key markets last fiscal, leading to a jump of ~25% in its exports even as India’s exports declined ~9% on-year. In fiscal 2024, however, a good produce backed by normal weather patterns and steady demand from China, as its economy opens, will drive revenue up for Indian players.

Indeed, India’s shrimp exports to China are likely to cross $1.2 billion this fiscal compared with ~$0.8 billion in the last one. With logistics cost normalising, demand from the US and Europe should revive from the lull last season.

Himank Sharma, Director, CRISIL Ratings said, “Buyers from the US and Europe prefer shrimps processed in India because of better quality- and disease-control measures. With supply chains getting restored, Indian exporters can replace Ecuadorian suppliers and regain their lost market share. Revival in the Chinese economy will also aid growth in shrimp exports from India. Revenue will grow 5% in fiscal 2024 on the back of volume growth of 8-10% despite a reduction in realisations.”

Last fiscal, shrinking volume and increased input costs of shrimp produce to the processors, led to operating margin falling 50-60 basis points. However, depreciation in the rupee shielded profitability to a large extent. This fiscal, with volumes reaching a lifetime high, input costs will normalise, while realisations taper. However, with the drop in input costs being steeper than that in realisations, the margin may inch up to the erstwhile level of 7.5%. In anticipation of higher demand, shrimp players are expanding capacities and will add close to 20% of their existing gross block this fiscal. That said, higher revenue and adequate cash accrual will ensure low reliance on debt.

Nagarjun Alaparthi Associate Director of CRISIL Ratings said, “The shrimp sector has displayed financial prudence for quite some time now. Hence, despite moderate debt addition over the medium term, credit profiles will remain strong. Total outside liabilities to tangible net worth and interest coverage ratios will remain comfortable 0.5 times as on March 31, 2024, and 8.0 times in fiscal 2024, respectively.” That said, any adverse fluctuation in currency rates, global economic vulnerabilities, climatic impact on shrimp production, or regulatory changes remain key monitorable.