Oct and Nov are usually frenetic for Veraval’s fish processors who export to Europe, as increased demand because of the Christmas season causes prices to appreciate. However, this is the second straight year that exporters have not got good prices and there has been a decline in demand. Exporters attribute this slowdown to inflation and the Eurozone economic slowdown.
Veraval is the hub of seafood processing in Gujarat, with around 150 units processing and storing fish for export. Fish from nearly all of Gujarat, including places such as Porbandar, Mangrol, Jafrabad, Okha, Diu and South Gujarat, comes here for processing, which exporters transport frozen.
Gujarat exports around Rs 5,000 crore worth of fish, of which Europe accounts for 30%. Fish exports fell badly during the Covid pandemic, due to health apprehensions. Thereafter, it was expected that exports would pick up, but the war between Russia and Ukraine has affected the economies of many European countries. This, added to Eurozone inflation, has shrunk the buying capacity of consumers. These factors affected Christmas exports last year and the same situation continues.
According to the exporters in Veraval, exports are down by 20% this year too. Jagdish Fofandi, a leading exporter, said, “There is a slowdown in the European market because of geopolitical reasons. The buying power of the customers there has dropped, and importers do not keep much inventory. Because of this situation, there is no improvement in pricing, and it has adversely affected our profitability.”
According to the exporters, 40% of the fish exported to Europe is sold in supermarkets and directly consumed, while the rest is consumed by the HoReCa (hotels, restaurants and cafes) segment. The European market consumes cuttlefish, pomfret, lobster and jumbo shrimp. These do not have demand in China.
“Germany’s economic downturn is also pulling down other countries. European people and tourists no longer spend as much on expensive seafood dishes in restaurants; instead, they buy sandwiches. Export demand is 20% down, because of which exporters have inventory piling up,” said Kenny Thomas, another exporter who focuses exclusively on the European market.
“The European market is struggling due to high energy prices because of the war between Russia and Ukraine. Energy requirements increase manyfold in the winter, shrinking their buying capacity for other expensive items,” said an exporter.
