Kochi: The US department of commerce on Thursday selected two largest shrimp exporters to the US, Devi Seafoods Ltd and Falcon Marine Exports Ltd, as sample companies to represent India for the second annual review of the anti-dumping duty imposed in shrimp exports.
Devi Seafoods, the largest exporter of shrimp to the US, accounting for nearly 15% of India’s exports to the US, now pays 4.93% anti-dumping duty. Falcon Marine, accounting for around 12% of exports, pays 11.09% duty.
The exports of the two companies during the period of review—1 February 2006 to 31 January 2007—will be scrutinized to determine new duties.
It is customary for the US commerce department to select two or three companies as representatives of one country to determine the duty.
The duty on Devi Seafoods was decided in 2004 when it was selected as a sample, while that of Falcon was determined during the first annual review of 2006.
The duty is calculated on the basis of export prices of shrimp to the US in comparison with the prices in another country that is considered to be fair value. For instance, if the price of shrimp exported to the US is $20 (Rs808) a kg against the fair value price of $24, it is treated as dumping of material into the US.
Now, exports of Devi Seafoods and Falcon Marine to the US—compared with other countries—will be assessed to determine the new duty for these two companies. Once that is decided, at the second stage, the average of duty levied on these two companies will be considered the benchmark to fix the duty structure for all shrimp exporters.
Devi Seafoods managing director P. Bramhanandam said matters can turn in favour of India since the two companies selected already have quite low duty levels. However, there is no guarantee that their duty level would remain unchanged.
For instance, the duty imposed on Hindustan Unilever Ltd was raised from 15.36% in 2004 to 24.52% in 2006. Following this, the average duty went up from 10.17% to 10.54% after the first annual review.
This time around, since the two companies already had low duties and a scrutiny of their export accounts for the review period might not indicate major price differences, A.J. Tharakan, national president of the trade body Seafood Exporters Association of India, expects a lower duty after the latest review. In all, 74 exporters have shipped shrimp worth $251.6 million to the US during the period for the second annual review.
The US commerce department in its federal registry says: “Due to the large number of requests for administrative review and the department’s experience regarding the resulting administrative burden to review each company...it is exercising its authority to limit the number of respondents selected for review. In selecting the respondents, the department intends to select the largest exporter by US export volume.”
Meanwhile, India is preparing for the final hearing of its plea against customs bonds, coming up before the World Trade Organization disputes panel on 24 July.
Government trade promotion organization Marine Products Export Development Authority chairman G. Mohankumar said the earlier arguments before the panel were quite convincing.
The bond, a cash guarantee given to the US Customs Border Protection for an amount calculated at 100% of the duty payable on total exports during the previous one year, is over and above the anti-dumping duty of 10.54%, hitting the exporters hard.