Seafood Stocks May Rise with Interim Budget: Here's Why

Last Updated: 6 Aug 2024

One of the few sectors for which government announced incentives in the Interim Budget is the seafood exports sector. It was announced that the government will take steps , under Pradhan Mantri Matsya Sampada Yojna (PMMSY), to double the export of seafood products to Rs 1 lakh crore. It was also announced that 5 integrated aquaculture parks will be set up. This will be done to boost productivity in the fisheries sector.

India’s seafood exports touched record highs in 2022-23

In the past budgets, specific announcements for fisheries or seafood products had been rare. The incentives announced in this budget follow India’s seafood exports touching record highs in 2022-23. USA, China, Europe etc. are the major importers of seafood products from India. India exported 1.7 million tons of seafood products in 2022-23. This was worth US $ 8.09 billion. The y-o-y growth in 2022-23 in terms of volume or quantity was 26.73%. In value or dollar terms the y-o-y growth in the year was 4.31%. Clearly, the government is seeing a major opportunity for the country to earn dollars through seafood exports.

Seafood exports are sensitive to economic cycles in importing countries

Seafood exports from India are sensitive to economic cycles in the importing countries. The current economic slowdown in Europe, China and other parts of the world may have an adverse impact on India’s seafood exports. Consumption of imported seafood can be classified as a discretionary expenditure. People cut down on discretionary expenditure during times of economic slowdown. They increase it during times of economic boom.

Seafood stocks may get a boost in the medium and long term

Frozen shrimp is the top seafood item that is exported from India. Out of the $8.09 billion of seafood exports from India in 2022-23, frozen shrimp accounted for a whopping $ 5.41 billion, according to data from Ministry of Commerce.

Other top items in India’s seafood exports basket are black tiger shrimp, frozen squid etc. The measures announced in the budget for seafood exports may be a positive for stocks in this sector. These include stocks such as Apex Frozen Foods, Coastal Corporation of India etc. These stocks may get a boost in the medium and long term too. Visibility and coverage of these stocks are also likely to increase post the budget announcements.