Shrimp industry cheers up as US reduces duty

Shrimp industry cheers up as US reduces duty

Kochi: It is advantage India as the US department of commerce has lowered the anti-dumping duty on Indian shrimps from 10.54% to 7.22% after a final determination of the federal agency’s first annual review.

The duty reduction was made after the federal agency heard out three top shrimp exporting companies from India. During the preliminary hearings, the three companies, Falcon Marine Exports Ltd, Hindustan Unilever Ltd, and Liberty Group, had their duty levy fixed at 11.09%, 24.52% and 4.03%, respectively. Taking into consideration also the quantity of shrimp exported by these companies, the average duty for other Indian exporters was fixed at 10.54% at the preliminary hearing.

After Hindustan Unilever, which already has exited the seafood business, and Falcon made a presentation to the commerce department, the two company’s sales records were examined, leading to their duties coming down to 18.43% and 4.39%. The average calculated for other Indian exporters has now come down to 7.22%.

India is awaiting the verdict of the World Trade Organization (WTO) disputes panel on its plea against the imposition of a customs bond, which is calculated at 100% of the duty payable on total exports during the last one year. The bond, a cash guarantee collected by US customs against any further rise in the anti-dumping duty, comes over and above the duty, making shipments unaffordable.

G. Mohankumar, chairman of the government trade promotion body Marine Products Export Development Authority (MPEDA), said that with the duty being cut to a big extent, India now has a competitive edge and would utilize this position.

“We are awaiting the verdict of the WTO panel, which can be favourable for India," he said. “Since the US has already begun the process for the second annual review of the duty, we can think of moving the WTO against the practice of zeroing being followed there for calculating duty margins. Already, Ecuador, which had a low duty of 3.58%, was out of the duty structure, winning a favourable verdict against zeroing at the WTO."

Under zeroing, shrimp sold above a fixed price to any country called fair value is totally ignored, and only the price below it is considered for calculating anti-dumping duty. “This practice literally offsets non-dumped comparisons in anti-dumping proceedings," said Elias Sait, secretary general of the Seafood Exporters Association of India (SEAI). “A meeting of the exporters is being convened next week to consider moving the WTO on this issue."

During the first annual review, around 25 exporters had gone in for a settlement with the Southern Shrimp Alliance (SSA), a US-based shrimp association, which had initiated the anti-dumping duty move stating that India, Brazil, China, Vietnam and Ecuador were dumping their shrimp, which had adversely affected their domestic market.

“As part of the agreement, the SSA had withdrawn the names of these companies for review and now their duty will stand at the original 10.17%, denying them the advantage of a lower duty," Sait added.

Sailesh Patnaik, general manager of Falcon Marine, said he is happy as the development would benefit the shrimp industry in India.