US sets preliminary anti-dumping duties on Indian shrimp

New York: India, China and three other Asian countries will be subjected to high anti-dumping tariffs on shrimp exports to the US, due to fears that low price imports are putting American fishermen out of work.

The US Commerce Department set preliminary duties last week of 5.91 percent on shrimp exports from India, and a much higher 62.74 percent from Malaysia. The US will also impose countervailing duties on shrimp exports from Thailand (2.09 percent), China (5.76 percent) and Vietnam (6.07 percent).

Malaysia will be hardest hit if its duty is not relaxed, meaning it will no longer be a major supplier of shrimps to the US. The final decision will be made in mid-August.

The duties are also a blow for Indian shrimp exporters as the US is their biggest market after Europe.

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[caption id="attachment_838929" align="alignleft" width="380"] Representational Image. Reuters[/caption]

"This will affect our exports to the US and increase the vulnerability of India's small-scale fishing communities, harvesters and processors," said Ravi Reddy, president of the Seafood Exporters Association of India.

Reddy said the US decision comes at a time when the industry is already struggling with soaring ocean freight costs and stepped price hikes in diesel which are used to power fishing boats. In January, the Indian government allowed state fuel retailers to raise prices by up to 0.50 rupees, a litre each month to gradually align them with market rates.

During 2011-12, Indian seafood exports stood at $3.5 billion, according to the Marine Products Export Development Authority (MPEDA). The US and Europe accounted for over 45 percent of India's total seafood exports which is driven largely by frozen shrimp.

The US Coalition of Gulf Shrimp Industries had asked for an investigation in December, saying their industry was at risk because of lower-priced imports from India, China, Vietnam, Indonesia, Malaysia, Thailand and Ecuador.

The US group says it has documented over 100 programs that provide subsidies and benefits to shrimp producers in the seven countries, including low-interest loans, tax breaks, and even free shrimp feed. Among the examples cited: India provides subsidies to reduce ocean freight costs; Thailand buys shrimp from farmers and sells it to processors at low prices; China has provided financing to build the world's largest shrimp-processing and export plant; Malaysia is spending millions to build shrimp farms.

The US Commerce Department found Indonesia and Ecuador also have subsidies of 0.81 percent and 0.39 percent respectively, but the amounts are too low for duty to be collected.

Americans gobble up more than 1 billion pounds (454 million kilograms) of shrimp, the nation's most popular seafood, according to the US International Trade Commission. The seven countries subject to the investigation exported $4.3 billion worth of shrimp to the US in 2011, accounting for over three-quarters of the domestic market.

Next Steps

The US Commerce Department is expected to announce its final decision by mid-August.

The International Trade Commission which determines whether domestic US industry has been harmed by subsidies from other governments also must approve final duties for them to take force.