January 23, 2006

Asian shrimp farmers expand markets as US impose tariffs

While Vietnam called for India to join hands to lobby the US government to lower its shrimp import tariffs, shrimp fishermen in the US may be left wondering whether what else is left for them in a market that has seen falling prices for 15 years.

For the shrimp fisheries in the southern states of the US which supply more than 90 percent of US domestic shrimp, the impact of foreign imports has been dire.

The price of shrimp has been falling since 1986 while catches have been going down. Even Mexican shrimp fishermen who sell on the US market were unable to compete with the lower import prices.

The Ad Hoc Shrimp Trade Action Committee filed a complaint with the World Trade Organization in 2003 that the US shrimp industry was undercut by shrimp imports because they were selling below market value. As a result, the US began imposing import duty.

India and Thailand have accused the United States of using import duties to protect US shrimp farmers. They argue that they are not dumping because their shrimp are legitimately cheaper than those in the US. They also allege that only a small number of rich US farmers are protected at the expense of poor Thai and Indian shrimp farmers. Such protectionist measures taken by the US, they said, contradict its oft-touted mantra of global free trade. 

Anti-dumping measures may be hurting the US as well. Since 90 percent of shrimp consumed in the US is imported, US consumers bear the higher prices caused by the anti-dumping duty. Some US fishermen said the anti-dumping duties have been of little help. While tariffs have raised prices by less than 10 percent since 2003, it has dropped over 25 percent over the last eight years.

The US is currently considering lowering bond requirements for shrimp importers from countries such as Vietnam and Thailand. Some Vietnamese shrimp exporters pay bonds as high as US$20 million a year.

However, Vietnam is also looking at other markets to export its shrimp. The Ministry of Fisheries sees China as a huge market for Vietnamese seafood. Seafood has become Vietnam's key export products to China according to the Ministry of Trade. Other seafood exports are fresh aquatic products such as garrupa, sugpo prawns, crabs and bivalve mollusks with peak volumes hitting 10 tonnes a day. In 2005, the Vietnamese Ministry of Fisheries conducted numerous promotional activities globally to market Vietnam's seafood products. This year, the Ministry will organize more of such events in China, especially Yunnan, where demand is high.

Thailand, the biggest supplier to the US, has seen a 43 percent drop in US shrimp exports since tariffs began. However, Thai exports of shrimp to other countries is expected to be bright in 2006, said a report by Kasikorn Research Center. Exports began improving last year as several countries grappled with problems such as shrimp disease and pollution, causing global shrimp production to fall. Thai exports to the EU are expected to grow in 2006. The report encouraged Thai exporters to look at the Japanese market more as Japan's economy recovers.

Farmers in India are also complaining about the 10 percent tariffs on Indian shrimp imports imposed by the US. In value terms, the US accounts for close to 36 per cent of all seafood exports from India, but Europe is the leader in quantity. Shrimp, a high value product, goes to the US while other products go to Europe and China. The Indian seafood industry is hoping The International Seafood Show starting from 3 Feb in Kolkata will bring in more sales as seafood industry giants from abroad are expected to participate.