August 3, 2004

 

 

US Shrimp Tariffs Favor Thailand

 

Thai shrimp exports will likely increase by about 15 percent to 150,000 tonnes this year, after concerns were eased when the US government imposed the lower-than-expected tariff rate on Thai shrimps.

 

The chairman of the Thai Shrimp Association, Somsak Paneetatayasai said Thailand's shrimp exports to the US are to have an average anti-dumping-duty rate of 6.39 percent, the lowest among those imposed on five other foreign countries. The new rate is forecast to help boost Thai shrimp exports to the US for the rest of the year.

 

China will have to pay as much as 49.09 percent as an average tariff for shrimps exported to the US, Vietnam will pay 16.01 percent, Brazil 36.91 percent, India 14.20 percent and Ecuador will pay 7.30 percent.

 

"More than 75 percent of the US's shrimp imports come from the six [mentioned] countries and Thailand has a market share of 27 percent," said Somsak.

 

The low tariff gives Thailand an edge on other shrimp exporters.

 

However, the announcement of the anti-dumping tariff rates will be revised on December 17, 2004.

 

Thailand's shrimp exports this year are expected to reach 240,000 tonnes, about the same quantity as last year. The country has already exported 85,000 tonnes of shrimps, higher than the same period last year. Nonetheless, the export this year is forecast to be about 22.5 billion baht, lower than last year by 26 billion baht, due to the world's falling shrimp price.

 

Meanwhile, Thai Union Frozen Products Plc (TUF), Thailand's biggest shrimp exporter by market value, said its shrimp exports may rise this year after the US imposed the new tariff rate which also made the shares rise.

 

Shares of TUF on Friday rose 0.80 baht to 21.50 baht, which is a 3.9 percent gain. It is the biggest increase since July 7, after concerns that the tariff would have negative impacts on Thai shrimp exports. Exports have slowed down since early in the second quarter when the US government accused the six shrimp exporters, including Thailand, of shrimp price dumping in the US.

 

An analyst at BT Securities said the new tariff rate will help increase the market share of Thai shrimps in the second half of the year. BT said TUF may post a higher-than-expected profit for 2004 because the price of tuna, a product it sells in the US under the label of Chicken of the Sea, may reach the highest in a four-year record which will help boost the sales value gradually. BT has a target price of 20 baht for TUF's shares.

 

As for Charoen Pokphand Foods Plc (CPF), the country's biggest chicken exporter, BT said the company will also gain from the new shrimp tariff rate, despite the bird flu outbreak. CPF will attempt to export only processed chicken in the near future, from the current 90 percent. Sales from shrimps and chicken are expected to post positive operating results.