Exporters adjust to challenges in turbulent global marketplace. (Riders On The Storm).

Time was when Gul Kripalani, a 30-plus year veteran of the Indian seafood industry, spent most of his working hours selling fishery products and farm-raised shrimp. As chairman and managing director of the Pijikay Group of Companies, he was not unaccustomed to laboring seven days a week on behalf of customers around the world.

Those were the good old days! Now he's working eight days a week, hall of which are devoted to dealing with problems faced by the country's seafood producers. In the role as national vice president of the Seafood Exporters Association of India (SEAI), Mr. Kripalani's phone rarely stops ringing.

"Tomorrow I will join a SEAI delegation journeying to Delhi to request the Ministry of Commerce to grant reconstruction funds to companies that have been hard hit through no fault of their own," he recently told this reporter over dinner at the Hotel Oberoi in Mumbai.

Nodding to Ashok Naidu, deputy director of the Marine Products Export Development Authority, he added, "We are pleased that MPEDA is supporting this proposal."

The SEAI vice president reported that a growing number of Indian seafood producers and marketers are struggling to cope with problems that add up to a kind of perfect storm that nobody wants to get caught in without protection. The challenge is to stay afloat amidst a convergence of difficulties ranging from low export prices, non-tariff barriers and a resulting crunch in liquidity among those forced to dip into working capital to service bank loans which were taken out to finance plant modernization.

Shrimp and cephalopod processing companies in particular invested a lot of money to upgrade equipment and meet or exceed quality and food safety standards of importing countries, only to be caught in the undertow of a zero-tolerance testing regimen among European veterinarian inspectors which began in earnest during January of 2001 after the EU temporarily banned seafood imports from China due to the discovery of trace elements of the antibiotic chloramphenicol.

"It is clear that some inspection authorities in the EU are testing and re-testing imports with the intention of finding something wrong," asserted Mr. Kripalani. "We are especially suffering from this not because our products are being rejected, but because of the additional costs borne by long clearance delays at ports of entry."

A meeting with in Cochin with Anwar Hashim, managing director of the Abad Group, confirmed the SEIA vice president's point. "Containers entering some European ports are now delayed for six weeks or so as tests are conducted. During that time payment for demurrage averages 6,000 euros, plus interest," he told QFFI. "Half of this cost is generally the shipper's responsibility."

Figuring that a container of scampi (Peneaus rosenbergii) is valued at about $150,000, it's no wonder that Indian shippers are keen on sending such payloads to markets other than Europe--where it will be cleared without serious delay. As such, importers in Dubai have been getting great buys of late.

Two years ago the price for 16/20s was $18; now it's not more than $11. With a drop in price of 40%, exporters who used to exact margins of 10% to 15% are now pleased if they can eke out a 5% return for his efforts.

Thus far in 2002, the EU reportedly rejected 32 seafood consignments--of which 18 were said to have tested positively for presence of minute quantifies of antibiotics.

One thing is certain as far as MPEDA is concerned, it will do whatever it takes to protect India's $1.3 billion annual exports of fishery products.

"By 13 October, we have to submit a detailed report to the EU on these rejection cases," said MPEDA Chairman K. Jose Cyriac. "We have to trace the contamination and ensure corrective action has been taken. The EU is looking for assurance that there will be no recurrence of such instances. We have to be seen to be taking the issue seriously."

The chairman will have it no other way. "The buck stops with the exporter," he said. "Whether contamination occurred at the farming level or at the hatchery, it is up to him to ensure total quality control."

MPEDA and SEIA will no doubt work together to make this so. MPEDA is already providing financial assistance for seafood packers to procure kits for detecting antibiotics.

Meanwhile, Gul Kripalani has reason to be optimistic. "We are seeing a ray of light at the end of the tunnel, certainly," he told QFFI. "After going through a world of problems, there is reason to believe that things are starting to mend. We hope that some sort of normalcy will soon resume."