Fuel supply disruptions in Andhra Pradesh drive India shrimp farmgate prices lower

Diesel supply disruptions and a labor shortage in Andhra Pradesh hit the shrimp industry as raw material prices remained under pressure in the week ended May 1, according to several exporters, traders and shrimp farmers.

Andhra Pradesh accounts for more than 80% of India's total vannamei shrimp production in 2024-25, according to the Marine Products Export Development Authority (MPEDA).

Platts, part of S&P Global Energy, assessed head-on, shell-on shrimp farmgate at Rupees 355/kg ($3,742/metric ton) May 1. The price was down Rupees 16/kg ($193/mt) week over week.

Diesel supply in Andhra Pradesh was disrupted early in the week ending May 1. A Visakhapatnam-based exporter said there was a demand-supply mismatch following speculation of a supply shortage and a fuel price hike. Demand rose as industries and individuals began stocking more fuel, the exporter said.

Limited diesel supply disrupted the transfer of raw materials from farms to processing plants. Arrivals at the farms were minimal, a trader based in Bhimavaram told Platts.

Meanwhile, fuel supply disruptions impacted farmers, prompting many to harvest early to avoid crop loss, a Nellore-based farmer said May 1. Shrimp farmers depend heavily on diesel-powered motors to run aerators to maintain oxygen levels in ponds. Without running aerators, farmers risk losing the crop.

Farmers consume about three to four liters of diesel per hectare per day to run generators and aerators. With supply disruptions, many farmers risk losing their crop, the farmer said.

There was a distress harvest due to speculation of a diesel shortage, which further softened farmgate prices, the Visakhapatnam-based exporter said. The source said fuel supply disruptions were resolved by the end of the week.

Despite the price drop in the week ended May 1, raw material prices remained elevated due to lower yields. Disease concerns and delayed seeding earlier in the year led to lower yields in April, which is typically the peak availability month.

Meanwhile, legislative assembly elections in West Bengal and Assam led to a labor shortage in processing plants in Andhra Pradesh during the week ended May 1, a Nellore-based processor said.

Many processing plants, especially in the Nellore region, employ migrant laborers from Bihar, West Bengal, and Assam, the processor said. The laborers traveled to their home states for the ongoing elections, causing a temporary labor shortage at many plants, the source said, while adding that raw material procurement remained minimal despite a fall in farmgate prices.

Market sources said laborers are expected to return in the week starting May 4, with market activity expected to normalize.

The fall in raw material prices had a limited impact on the export market as peeled shrimp prices remained rangebound. Platts assessed PDTO shrimp FCA India at $7,215/mt May 1, down $60/mt week over week.