US cutting duty on shrimp imports to benefit Indian farmers: ICRA
The Dollar Business Bureau
Credit rating agency, ICRA, said on Thursday that the decision of the US government to roll back the increase in anti-dumping duty (ADD) on the imports of shrimp from India will benefit the farmers in the country and lead to enhanced production.
“...The impact of any hike/decline in duty/tax will be passed on back to the farmers by the processors, and not to the end consumer. Hence, while farmers bear the price-risk, they stand to benefit from the current reduction in duty levels. This could lead to increase in sowing and higher shrimp production in the near term,” the agency said in a report.
The United States Department of Commerce (US DoC) in its 10th yearly review had hiked the weighted average ADD from 2.96 percent to 4.98 percent on the shrimp imports from India.
Observing that farmers will be benefitted from the duty roll back whereas for processors, it will be revenue/margin neutral, the rating agency said, “The USDoC in its final review on September 6, 2016 (w.e.f. September 13, 2016) stated that it will roll back the increase in the ADD imposed after the preliminary findings of March 10, 2016.”
India has become the largest shrimp exporter to the US after the production in Thailand being impacted by the Early Mortality Syndrome disease.
Over the last five years, cultivation of shrimps in India has moved mainly to high-volume Penaeus vannamei from low-volume high-value Penaeus monodon (black tiger).
The US is the largest market for India's frozen shrimp and consumed 123,114 tonnes of exports of frozen shrimps from the country in 2015-16.
Shrimp exports to the US consist of around 34 percent of sales in terms of volume, whereas it stands at around 39 percent of overall shrimp exports in value terms.
The exports of shrimp to the US stood at $1.33 billion during the financial year 2015-16.