June 23, 2016

 

 

Increased refusals of Indian shrimp exports by the US due to antibiotic residues, besides anti-dumping levies, is hobbling the country's seafood sector.    

 

In the first five months, the US Food and Drug Administration (FDA) refused 39 shrimp entry lines from India, which is more than the 34 entry-line refusals for the whole of 2015. This is a cause for concern as the US, as of fiscal year 2015, is the largest market for Indian seafood exports, 70% of which comprise aquaculture products. In the same year, export of frozen shrimp to the US grew 17.49% in volume and 12.87% in dollar terms.

 

But FDA refusals are up 30% so far, compared with 2015, according to a news report from the Indian newspaper Financial Express. The rate can possibly go up further as the FDA is reportedly inspecting more imported seafood items in 2016.

 

Adding to the industry's misery is the US government's recent hike in the anti-dumping duty imposed on Indian frozen shrimp imports. The preliminary average duty increased to 4.89% in the 10th annual review of dumping duties, compared with 2.96% in the ninth review, which covered Feb. 1, 2013 to Jan. 31, 2014, Financial Express reported.

 

The effect of the anti-dumping duty since 2004, when it was imposed by the US Department of Commerce, is evident in the decrease of Indian shrimp exporting companies to the US from 228 12 years ago to less than 75 today.

 

Low-priced

 

Another challenge that the Indian aquaculture industry faces is the lobbying of the Coalition of Gulf Shrimp Industries against low-priced shrimp imports from seven countries including India. The association of shrimp farmers claims that these imports have depressed domestic prices and eroded domestic sales, among others.

 

The Indian government, in an apparent move to prop up the industry, has reportedly announced new rules allowing 100% foreign ownership in its fisheries and aquaculture sector including breeding and brood stock. This is a radical change in its foreign direct investment (FDI) policy, which it hopes will help the country boost its fish and shrimp production and exports of high-value products.

 

While the full entry of foreign investors is a welcome move, it would do well if the government give more attention to helping local fish and shrimp farmers to produce safe, antibiotic-free aquaculture products to reduce, if not totally eliminate, US rejections.

 

This would eliminate one hurdle to easier access to the important US market.-Rick Alberto