Since the April spill, prices in the US have increased 40% as supply has shrunk.
Among the consequences of the oil spill in Gulf of Mexico is a surge of hope among seafood exporters, especially of shrimp.
Since the April spill, shrimp prices in the US have gone up by 40 per cent as supply has weakened. With one-third fisheries in the Gulf being forced to shut, less shrimp is being caught. Prices are expected to rise further, say experts.
US consumers also get shrimp from Mexico, Brazil, India and Southeast Asian nations such as Taiwan and Vietnam. The initial price rise is expected to stabilise soon but, say reports from the US, it may take months before the catch of fish and shrimp from the Gulf reaches the normal level. The oil spill will impact sea turtles, fish, marshes and other wildlife for many years to come, says biological oceanographer Nancy Rabalais of the Louisiana Universities Marine Consortium.
According to Anwar Hashim, president, Seafood Exporters Association of India (SEAI), this is a chance for India to increase exports. Export prices will rise, he says. The spill came just as the shrimp harvesting season was about to begin in mid-May and has shut key fishing waters. The shrimp caught off coasts of Louisiana, Mississippi, Alabama and Florida is 10 per cent of the US market. There is also concern that people will shun any shrimp that has the taint of the oil spill. The impact on other seafood markets is likely to be even more serious, as Gulf fisheries are some of the most productive in the world, home to 59 per cent of US oyster production and three-quarters of the country’s wild shrimp.
Yet, says SEAI, the major benefit of this supply vacuum is likely to be taken not by India but by East Asian countries such as China, Taiwan and Vietnam. This is because of the price advantage they have due to production of the low-cost Vannamei grades, which India has barely begun. For diverse reasons, Indian exporters are giving more thrust to European, Japanese and Asian markets.
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Due to heavy anti-dumping duty and the need for Customs bonds, the number of exporters from India to the US dropped from 225 in 2004 (when heavy duties were first imposed) to just 70 in 2010. Exports to the US have been declining. They fell 10 per cent last financial year.
However, if the environmental impact of the spill prolongs and supply gets affected in the long run, seafood exporters will get time to switch and build a base. So, while there may be limited benefit at the moment, there may be one down the line if damage control by the US is prolonged.