June 19, 2013

 

US imposes 5.91% countervailing duty on Indian shrimp

 

 

India is slapped with a 5.91% countervailing duty on shrimp export to the US, India's number one shrimp market, although the volume of shrimp exported to the US is unlikely to be affected.

 

The new duty combined with the existing 3.5% duty means exporters now have to pay nearly 9% of the value of their shipments to the US Customs and Border Patrol at the port of entry. This additional cost will most likely will be paid by shrimp producers.

 

Ravi Reddy, president of Seafood Exporters Association of India (SEAI), said that the duty was an 'unfortunate' extra burden on the exporters that will involve a lot of administrative expenses.

 

The duty was imposed as a result of a complaint by the Coalition of Gulf Shrimp Industry (COGSI) claiming that Indian exporters received government subsidies and thus they had an 'unfair trade practice' that gave them an unfair advantage. The US Department of Commerce (DOC) found the claim valid on shrimp imports from India, China, Malaysia, Vietnam and Thailand.

 

Reddy said the duty was unlikely to discourage exports to the US and that, although the US has already started charging the 5.91% duty, a final decision will come in July-August -- with a remote possibility that the current 3.5% anti-dumping duty could be adjusted against the duty, he said.

 

The US International Trade Commission's (USITC) inspectors are already working at Devi Fisheries and Devi Seafood in Visakhapatnam, two respondents from India. The inspectors' report will influence the final decision on the duty rates.

 

Sources in Kochi said that the sector has confidence that the duty would not affect exports because Thailand, the largest shrimp exporter to the US, has had its crops destroyed by the early mortality syndrome, leading to a sharp fall in exports to the US. India is the fourth-largest shrimp supplier to the US and could fill the gap left by Thailand.

 

Another advantage is the rupee's slide against the dollar, which means that exports now fetch higher value in rupee terms.

 

Nobert Karikassery, Treasurer of Seafood Exporters Association of India and President of the Kerala Seafood Exporters Association, said the total value of seafood exports this financial year would definitely rise, but that exporters on the East Coast would harvest better value than those on the West, as the former focused on aquaculture rather than sea catches.

 

"This is the best year for vannamei shrimp industry in terms of production, productivity and prices," Karikassery said.

 

Meanwhile, prices of seafood exports in Andhra Pradesh are falling, particularly the vannamei shrimp it exports to the US and Europe, due to a glut in production and allegations of cartelisation among local exporters to avoid competition from other domestic producers.