Marine exports may miss target as rupee rises against dollar

Off target: Shrimp accounts for nearly 54% of India’s total marine exports worth Rs8,364 crore, though its share is just 22.43% in volume

Marine exports, which crossed the $1.8 billion (Rs7,164 crore) mark in fiscal 2007 and is expected to touch $2 billion in the current fiscal year, may miss the target by a wide margin because of the rising rupee. The local currency, which breached the Rs40 to a dollar level last week, following the US Federal Reserve’s decision to cut its policy rate, got stronger on Monday to close at Rs39.77 to a dollar before marginally weakening on Tuesday.

Farmers in Andhra Pradesh have started abandoning their shrimp farms since the price offered by the exporters is so low that farming has become financially unviable. The state accounts for 75,464 tonnes of India’s total aquaculture shrimp production of 144,347 tonnes. Shrimp accounts for nearly 54% of India’s total marine exports worth Rs8,364 crore, although in volume its share is just 22.43%.

“Many farmers at Nellore, the largest shrimp farming district in Andhra Pradesh, are no longer in farming as there are very few takers for their produce at reasonably good prices,” said Zabir Khan, secretary of the Nellore District Prawn Farmers Welfare Association.

With the rupee appreciating by more than 11% this year, the the income of exporters has gone down drastically because their earnings are only in dollars.

Source: Livemint