Effect of Price Volatility on the Profitability of Asian Seabass Farming in Pond Production System: Evidence from Andhra Pradesh, India

Abstract

This study evaluates the economic performance of pond-based Asian seabass (Lates calcarifer) culture in India through profitability and sensitivity analyses, focusing on Andhra Pradesh as a case study. The pond culture of Asian seabass in Andhra Pradesh has seen significant growth in recent years. A survey was conducted using a structured interview schedule with 60 seabass farmers from two districts, namely Krishna and Eluru. The analysis revealed that farm and management characteristics, including average pond size, crop duration, stocking density, feed usage, and chemical inputs, were significantly higher (p < 0.05) in Krishna compared to Eluru district. The average feed conversion ratio (FCR) was estimated at 7.43 across both districts. Variable costs dominated the total production cost, accounting for 93.05%, with feed costs alone constituting 64.65% of the total cost. Fixed costs contributed a minor share of 6.95%. Feed price and seabass market price emerged as the key factors influencing profitability. Cost and return analysis showed that seabass farming was unprofitable under adverse market price conditions, particularly due to disruptions in the Kolkata export market. However, an overall assessment based on sensitivity analysis demonstrated that seabass farming was profitable under normal market conditions. Based on the findings, this study recommends that farmers focus on the rational use of feed and consider early harvesting during unfavourable market conditions. Additionally, government support through price stabilization measures during adverse market scenarios is crucial for ensuring the profitability and sustainability of Asian seabass farming in Andhra Pradesh.