Kochi: India’s shrimp exports to the United States are down because of the latter’s anti-dumping duty on exports of the product from India, and another tariff barrier, and most exporters are now eyeing the European Union as a market. Shrimp exports to the US now attract an anti-dumping duty of 10.54% and a bond, which is essentially a cash guarantee for 100% of the duty payable on total exports during the previous year.
India currently has 74 shrimp exporters who trade in around $251.6 million worth of the product. Of this number, 23 are yet to respond to the US department of commerce (DoC) in the context of a second annual review of the anti-dumping duty.
These companies could now be slapped with a duty that is as high as 84%.
According to DoC rules, this higher duty will be levied on exporters who did not respond and furnish details of the quantity and value of their exports. The second review covers the timeframe between 1 February 2006 and 31 January 2007. In the absence of details, these firms will have to pay a higher duty based on the ‘adverse facts available’.
Hostile reception: Traders say it is difficult to continue the shrimp trade with the US in the present form
Concerned exporters have been looking to the EU and will probably increase their efforts to market their exports to this bloc. According to an official of the government’s Marine Product Export Development Authority (MPEDA) who did not wish to be identified, the European Union is likely to have the largest share, about 32%, in India’s Rs8,000-crore seafood exports for the financial year ended 31 March, 2007.
During the first annual review covering the period between February 2005 and Jaunary 2006, the anti-dumping duty was calculated on the basis of the price differential at which the exporters sold their products in the US compared with what they charged in other countries.
At that time, 17 Indian exporters had not responded to the US state department and a 84% anti-dumping duty was imposed on them. “This time the number has gone up to 23 owing to the adverse trade conditions in the US with the anti-dumping duty and a matching customs bond,” said Elias Sait, secretary-general of the Seafood Exporters Association of India (SEAI). The association has filed a separate case before the US Court of International Trade against the customs bond.
The DoC had sent out notices to 313 Indian shrimp exporters based on the lists submitted by the Southern Shrimp Alliance, an organization of the domestic shrimp industry in the US representing the states of Alabama, Florida, Georgia, Louisiana, Mississippi, North Carolina, South Carolina and Texas, and another organization Louisiana Shrimp Association.
Though only 74 shrimp exporters had exported to the US during the review period, another 54 exporters who received notices also responded. In case the duty is reduced, these companies could also look at exporting to the US.
A Kochi-based exporter who has had very small exports to the US during the review period and who has not responded to the US department said he was fully aware of the higher duty that would be imposed on his company. According to him, it is difficult to continue shrimp trade with the US in the present form. He is now looking at the European Union. The trader requested that he not be named.
Elian Sait, who was part of a team led by MPEDA chairman G. Mohan Kumar to the EU recently, said the market holds promise.
“The efforts taken by the industry and the authorities here to have strict quality control has prompted EU to look at increasing imports from India,” he added.