The Hindu Business Line : US move likely to affect shrimp prices

SHRIMP prices are set to decline with US buyers expected to stay away from the market. The other big buyer, Japan, may benefit from a glut in supplies with exporters targeting it.

Black tiger shrimp purchases by the US importers are expected to hit a low. The importers have become `cautious' in anticipation of a preliminary antidumping duty by the US Commerce Department. Black tiger shrimp prices have hit a plateau after the increase over the last few weeks on sustained purchases by the US buyers. The prices gained more than 50 cents since early this year to range around $5.10 a pound of 16/20 pieces. But buyers are now offering around $4.90 and are expected to quote lower early next week, say trade sources.

If the US International Trade Commission decides in mid-February that imports have injured the domestic industry, the Commerce Department will continue the investigation and may make a preliminary determination on June 8 and levy additional duty on further imports, they said.

The preliminary duty could also be made effective retrospectively of up to 70 days if the department decides that the exporting countries have stepped up shipments in anticipation of an antidumping duty. This will mean that shipments that reach US shores after March 10 could face additional import duty.

Therefore, buyers are expected to pick up stocks only up to the first week of February. US imports could then taper off if not totally come to a halt. The antidumping investigations are expected to continue up to October, when a final determination will be made.

The US shrimp imports from India in 2002 were $354 million in 2002. In 2003, between January and September its shrimp imports were $297 million. If US purchases decline during the period of investigation, the exporters would have to look to other markets such as Japan and the EU and emerging markets like Australia.

With other major exporters such as China, Thailand and Vietnam - the other targets for antidumping duty - also looking at these markets, there could be a glut in global shrimp supplies. Shrimp farmers in India are also awaiting developments in the antidumping case to decide on stocking their farms. Normally, stocking would commence in February, but the events in the US will decide the demand for shrimp seeds, according to hatchery operators.

Whether Japan can absorb the surplus from the drop in exports to the US remains to be seen. Japan's imports were around 2.5 lakh tonnes a year and till 2001 India was a major supplier accounting for at least 30 per cent of its requirement. But in 2002 and 2003 the US emerged a major buyer and Japan diverted its purchases to other producers such as Thailand and Vietnam.

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