Indian shrimp supply tightens amid flooding in Andhra Pradesh

The Indian shrimp supplies have been severely impacted by the torrential rains and flooding in the key state of Andhra Pradesh, market sources told S&P Global Commodity Insights Sept. 4. The market is likely to witness an uptick in prices in the coming weeks on tight supplies and increasing demand.

Many shrimp farms in Andhra Pradesh have been severely affected by the floods, which in turn has affected the shrimp supply chain in the region, market sources said.

Andhra Pradesh is the biggest producer of Vannamei shrimp in India, accounting for more than 80% of the country's total production.

Nearly half a million people have been impacted by the floods in the state, which has also immobilized the regional infrastructure, according to the official estimates. As a result, shrimp traders have no option but to wait out the adverse weather conditions, sources said.

Holiday demand boost likely

Amid all the worries regarding the flood-led supply issues, the demand for Indian shrimp is expected to get a boost from the US and other major buyers during the Christmas holidays, according to market participants.

The Indian Vannamei prices are likely to rise in coming months on the back of soaring demand from the US and others markets, as the Christmas holiday season approaches, an Andhra Pradesh-based exporter said.

Freight rates have been moving higher and offers for one 40-feet reefer container from Visakhapatnam to the US East Coast crossed $10,000 for shipments in October, another exporter said.

The eastward reefer freight rates are also on the higher side and sellers are on the sidelines despite steady demand from China, another exporter said. As a result, Vietnam is a more competitive option than India for China-based shrimp buyers right now, he said.

India is the world’s second-largest shrimp exporter, behind Ecuador. The country shipped out 556,848 metric tons of Vannamei shrimp in 2023, which is 0.3% higher on the year, according to the data from the Ministry of Commerce. The US accounts for nearly 40% of India’s shrimp exports, the commerce ministry’s data showed.

Platts, part of S&P Global Commodity Insights, assessed peeled deveined tail on shrimp FCA India at $7,368 per metric ton Sept. 4, down $347 on the day.