While state fishermen associations have expressed fears they may have to drop the anchor of their boats due to lack of payment from traders, seafood exporters have pointed out that extra checks put in place by China, the biggest importer of Indian seafood, in view of the Covid-19 pandemic, has stretched the payment cycle and led to a cash crunch in the market.
On Friday, leaders and representatives from 16 major fishing harbours in Gujarat and Union Territory of Diu and state seafood traders and exporters held a meeting at Veraval and appealed to the Central government to intervene at diplomatic levels to persuade China to relax Covid-19 protocols for Indian seafood shipments, restore the business cycle and clear around Rs 200 crore due to exporters towards Merchandise Exports from India Scheme (MEIS).
The scheme, introduced through the Foreign Trade Policy (FTP), was launched by the Government of India to boost the export of notified goods that are produced or manufactured in the country.
Velji Masani, president of Akhil Bharatiya Fishermen Association, an organisation working for fishermen, said fishing boat owners were running out of cash and unable to purchase diesel, ice and ration or clear salaries of fishermen since they have not been paid by traders and exporters for the last two to three months.
“A fishing trip of 15 to 20 days requires a boat owner to purchase inputs worth Rs 3.5-4 lakh. Many of them have run out of their working capital and savings now. As a result, around 25 per cent of the 25,000 fishing boats in the state have already dropped anchors for indefinite period,” Masani said.
This, he added, comes on the back of a disrupted season. “The previous fishing season was marred by three cyclonic storms and early closure due to lockdown post the outbreak of novel coronavirus in March. The government has announced that fishermen holding Kisan Credit Cards would get Rs 2 lakh bank loans. But actually, banks are not giving more than Rs 30,000 to Rs 40,000 as loan. Fishermen have run out of cash and if fish traders and exporters don’t clear their dues, which are around Rs 700 crore, a majority of Gujarat fishermen may have to suspend fishing altogether,” Masani said. He also represents the state at the National Fisheries Development Board (NFDB) of the Central government.
Exporters, meanwhile, say they were going through a “liquidity crunch” as Chinese importers have delayed payments.
“Almost 65 per cent of seafood exports, especially fresh fish, from Gujarat goes to China. In normal times, Chinese exporters release payment within 21 days. But checking and scanning of seafood containers have increased at Chinese ports. The government there is detaining containers for up to 20 days as a measure against Covid-19. Therefore, it is taking more than 60 days to get payment from Chinese importers. We have also exhausted our capacity to borrow from banks to pay to fishermen. Hence, there is a liquidity crunch in the market and we are unable to pay to fishermen,” Jagdish Fofandi, president of Seafood Exporters Association of India (SEAI) told The Indian Express on Sunday.
Fofandi said India exports Rs 7,000 crore worth seafood annually with China being the largest destination for Indian shipments.
Gujarat, he added, ships around 70,000 metric tonnes seafood worth Rs 2,200 crore to China. “This year, however, there is a dip of around 35 per cent as compared to three years ago,” Fofandi said.
He said if the Centre releases around Rs 200 crore MEIS dues to exporters, it could ease liquidity crunch to some extent. “Payments for shipments to China made in September have not been cleared till date. The only positive is that the European market has remained stable. Therefore, we are requesting fishermen to focus on the catch of shrimps, cuttlefish, and squids which are converted into value-added products and exported to EU,” Fofandi said.
China mainly imports ribbonfish, croaker, cuttlefish, pomfret among others from India.
“It will help if the Central government intervenes and persuades China to relax its Covid-related protocols for seafood shipments and the turnaround time is reduced,” the SEAI president added.
Some fishermen leaders, however, accuse traders and exporters of manipulating the situation. “In the name of Covid-19, exporters are delaying payment to us while diverting the money to purchase fish from others at lower rates by making instant cash payments,” a fishermen leader of Gujarat, who had attended the Friday’s meeting, said.