In troubled waters

The US’ move to hike anti-dumping duty could well crimp Indian shrimp exports

Published 6 years ago on Mar 20, 2018 2 minutes Read
RA Chandroo

The US president Donald Trump is keeping up with his protectionist drive. After signing on tariff orders on aluminium and steel imports, the US Department of Commerce has now suggested a three-fold increase anti-dumping duty from 0.84% to 2.34% on shrimp imports. The department has mentioned that frozen warm-water shrimps from countries such as India, Indonesia, Thailand, and Vietnam were sold at less than normal value.

The turn of events threatens to derail the growth momentum of Indian shrimp exporters. In 2017, India contributed 32% to overall US shrimp imports at $2.2 billion. In January this year, India’s shrimp exports growth rate to the US hit a seven-month high of 49% to 61,593 tonne, valued at $201 million. More importantly, realisations increased to $10 per kilogram compared with $9.7 per kilogram last year.

However, the announcement from the US had triggered a panic among seafood exporters with shares of prominent shrimp and seafood exporters such as Avanti Feeds, Waterbase and Apex Frozen Food taking a knock. Previously, in 2004, when the US had imposed anti-dumping duty on shrimp imports, it had a drastic impact on India as the shrimp export industry shrunk in size to less than 75 players from 228 at that time.

From 2010, shrimp production in Asia was severely impacted by diseases, floods, labour issues, and environmental issues. Production in Vietnam, the largest exporter, declined 40% from peak levels. Thailand, once a top exporter, saw a 65% plunge in production from peak levels. China’s production too plummeted 60% as consumption more than doubled. During this ensuing period, Indian shrimp exporters emphasised on lower-density shrimp farms to control diseases while maintaining quality across the value chain, according to a Crisil report. India’s shrimp production doubled, and helped it grab the opportunity created by lower supplies from Asia.

While the Indian seafood export industry is alarmed, experts believe that a final review of the order, likely in 120 days, will lower the dumping rate. Last year, post a review the US had reduced the duty to 0.84 % from 1.84%. But whether that is going to indeed the case this time around is still not clear.