CVD on Indian shrimp exporters raised to 5.77%
Pressure on Farmgate prices as exporters lower offers
The US Department of Commerce raised the countervailing duty on Indian shrimp exporters in its final determination in the anti-dumping duty investigations into frozen water shrimp imports Oct. 28.
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In the final determination, the CVD on Indian exporters was set at 5.77%, except for two export companies that saw duties fixed at 5.87% and 5.63%, respectively.
The US DOC’s decision came as a “surprise” to many Indian exporters as the final determination of CVD on Indian exporters increased from the preliminary determination of 4.36%, while the CVD on Ecuadorian and Indonesian exporters was lowered significantly.
“This is the first time that US has imposed CVD on [Indian] shrimp. The rate of 5.77% is certainly high and it will create challenges for Indian exporters,” G. Pawan Kumar, National President at the Seafood Exporters Association of India told S&P Global Commodity Insights.
“We can seek revisions during the next review, which process will commence early next year. The decision of US DOC has to be upheld by International Trade Commission where also we will present our case,” Pawan Kumar added.
Platts assessed PDTO Shrimp FCA India, 31-40 counts/lb, at $7,193/mt Oct. 30, down $306 on the week.
Farmgate prices drop
Market participants said there has been downward pressure on Indian Vannamei shrimp farmgate prices since the US DOC’s final determination hearing Oct. 22.
The increase in CVD will cut into the exporters’ margin, a trader said.
One producer based in the Indian state of Andhra Pradesh said exporters and packers have lowered their offers and are willing to procure only at lower prices so as to reduce the impact of higher CVD on their margins.
The farmgate prices in West Godavari district of Andhra Pradesh fell by Rupee 30/kg ($357/mt) over the weekend, a farmer said Oct. 29.
The decline in prices is likely to hurt Indian shrimp farmers who have been facing lower prices due to global oversupply of shrimp since 2021.
“Unit value returns for shrimps exported to US has fallen by 20%-25% over the last four years. This impact is also felt at farmgate level,” Pawan Kumar said.
Increased competition
Meanwhile, exporters said the hike in CVD may lead to India losing its market share in the US to competitors like Ecuador and Indonesia.
Increased processing costs and container rates were already keeping the prices of Indian shrimp in the US on the higher side, a trader said.
India’s Vannamei shrimp exports to the US declined 4% year on year and 10% month on month to 22,789 mt in August, according to the Ministry of Commerce.
Over January-August, exports to the US increased about 2% year on year to 158,006 mt.
During the same period, Ecuador’s exports to the US increased by 14% to 151,026 mt, according to Ecuador’s National Aquaculture Chamber.