Shrimp exports plunge in FY07

Anti-dumping duty, customs bond requirement strangle sector.

The anti-dumping duty imposed on Indian shrimps, coupled with the requirement of customs bond, has seriously affected the export of marine products, especially shrimps to the US, in 2006-07.

Shrimp exports have dropped by 23 per cent in dollar earnings and 20.50 per cent in rupee terms compared with the previous financial year.

Total exports to the US dropped by 21.44 per cent on all items at 43,851 tonnes compared with 55,817 tonnes in 2005-06. There has been a steady growth in exports to the US, except in 2003-04 and 2004-05, and the country had a record export of 61,703 tonnes in 2002-03.

Also the drops in 2003-04 and 2004-05 were not as big as last year, with a section of the exporters terming the last year's performance as 'shocking', attributing it to the anti-dumping duty and the customs bond requirement.

Last year, India's earnings from exports to the US stood at Rs 1,350.47 crore, down by 17.62 per cent compared with Rs 1,639.24 crore in the preceding year. Shrimp exports alone dropped by 30.77 per cent at 24,748 tonnes, valued at Rs 1,083.42 crore. In the previous fiscal, India had shipped 35,745 tonnes valued at Rs 1,362.71 crore. In 2002-03, shrimp exports to the US accounted for 48,575 tonnes, valued at Rs 1,903.80 crore, while in the next fiscal, it stood at 40,034 tonnes, valued at Rs 1,506.15 crore.

Interestingly, there has been steep fall in the number of exporters during the last six years. In 2001-02, 179 exporters were active in exporting to the US, which came down to 80 in 2006-07.

The stringent norms and exorbitant duties had forced nearly 100 exporters to shift their focus to EU nations and Japan. Between 2005 and 2007, 27 exporters had stopped exports to the US. Indian shrimp imports to the US have been subjected to the anti-dumping duty from August 2004.

To make matters worse, in July 2004, the US Customs and Border Protection (CBP) issued the amended bond directive under which cash deposits and continuous bonds were required for exporters.

The US Department of Commerce (DoC) had announced the preliminary results of the first administrative review on the anti-dumping duty in March 2007, raising the weighted average from 10.17 per cent to 10.54 per cent for India and also fixed a punitive rate of 82.30 per cent for 17 exporters.

Both the duty and the continuous bond requirement had affected Indian exports to the US badly, and, according to exporters, unless the DoC takes a favourable decision in the second administrative review, which is on currently, India's access to one of the largest marine products markets would be limited in the future also.

Meanwhile, an experts panel appointed by the dispute settlement body of the WTO has started its meeting today in Geneva. A two-member high-level delegation is representing India at the discussions.