Profit margins of the Indian shrimp industry are likely to be impacted due to the hike in the anti dumping duty (ADD) by the US, but the exports volume may remain unaffected in the near term, says a report.
"There could be some margin compression across the supply chain, as these hikes are passed down to the producers or farmers and processors," rating agency Icra said today.
However, its vice president and sector head- corporate ratings, Pavethra Ponniah added, "Given that India accounts for 32 per cent of USA's shrimp imports volume, we do not expect any impact of the ADD hike on export volume and the growth trajectory is expected to continue in the near term."
The agency also expects the share of Indian shrimp exports to the US to increase given the sharp hike in ADD levied on exports from Vietnam to 25.39 per cent in March from 4.78 per cent earlier, against 2.34 per cent levied on Indian shrimp exports.
The US recently hiked the ADD on shrimp exports from India to 2.34 per cent from 0.84 per cent earlier.
India continued to be the largest supplier of shrimps to the US, contributing about 33 per cent to its total imports last year, while Indian shrimp exports to the US grew at an annual rate of 21 per cent during 2013 to 2017.
According to Icra, shrimp imports from India last year witnessed a 45 per cent growth aided by weak production dynamics in other major shrimp producing geographies such as Vietnam, China and Thailand.
During the first nine month of this financial year, Indian shrimp exports has witnessed a 29 per cent growth against the same period last year due to healthy volume growth, it said.
The growth was fuelled by the increase in exports to the US and Vietnam, it added.
The exports contribution to Vietnam surged to 26.3 per cent during the April to December period following weak production in Vietnam, the agency said.
Vietnam continues to be the second largest export destination for Indian shrimps.
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