US duty hike unlikely to hit Indian shrimp exports: ICRA
The hike in anti-dumping duty on Indian shrimp exports to US in the final review by the US Department of Commerce (USDoC) is unlikely to have a material impact on Indian exports, says rating agency ICRA.
India was the largest exporter of frozen shrimp to the US in 2017 with 32% share after some South Asian producers like Thailand suffered due to diseases in fish farms.
Mr. Pavethra Ponniah, Vice-President and Sector Head, ICRA, said: “We do not anticipate any material impact on volume of shrimp exports from India to the US, because of the hike in ADD. Given that the Indian shrimp export industry is a price taker, impact of this ADD hike will have to be absorbed across the supply chain, especially by the farmers.”
The effect of the anti-dumping duty from 2004 was dramatic on Indian exports.
“With the global industry witnessing sharp decline in realisations since November 2017, because of demand-supply mismatches, improvement in base price for the Indian shrimp farmers and processors would be critical for ensuring that Indian farmers continue to stock their ponds in the ensuing season. The final review of Vietnam’s ADD is also a monitorable as Vietnam competes with India in the global markets; Vietnam preliminary review (notified in March 201cool.gif came in at a staggering high 25.39%,” Ponniah added.
ICRA reports that during the period FY14-18, total Indian shrimp exports grew at a CAGR of approximately 20% in terms of volume. This growth was fuelled by the increase in exports to US and Vietnam. The export contribution from Vietnam surged from 16.1% (FY2014) to 25.4% (FY201cool.gif owing to weak local production dynamics in Vietnam, coupled with strong demand. Vietnam continues to be the second largest export destination for Indian shrimp.