April 25, 2005

US may shift away from Vietnamese shrimp

US shrimp importers may shift more of their purchases away from Vietnam to India, Thailand and Bangladesh. The reason is a ruling by the US to require Vietnamese exporters to buy bonds from insurance companies to gain entry to the US.

Last December, the US International Trade Commission (ITC) ruled that Vietnam and five other countries were dumping shrimp products at unfairly low prices on the US market and imposed varying duties on each country.

On April 26, the ITC is expected to issue a ruling that could lower or cancel the anti-dumping duties on shrimp exporters from Thailand and India because of damage they suffered during the tsunami last December.

US importers may choose those markets instead of Vietnam's, and shrimp exports from Vietnam could decline dramatically. Over the last two days, several US importers who are low on stock have agreed to purchase the bonds on behalf of Vietnamese exporters, but most major US importers are taking a wait-and-see attitude, said Nguyen Van Kich, chairman of the Shrimp Committee of the Viet Nam Association of Seafood Exporters and Producers.

Kich said importers from Japan may increase their purchases if Vietnam drops its prices to increase market share. Japan now imports mostly from China. According to the association, Vietnam's shrimp export revenues also look unlikely to reach the target of US$2.6 billion this year.