Seafood News - Industry Events - Seafood Market

Lexington Herald - Leader    29/11/2004 11:00:40

Charles HomansThe future of the U.S. shrimp industry and the price Americans pay for shrimp could be affected by an upcoming decision by the Commerce Department on whether to charge tariffs on foreign shrimp.

The tariffs would be imposed if the department determines that foreign shrimp farmers dumped cheap exports on the U.S. market -- meaning sold for less than it costs to produce them -- in an effort to harm the domestic shrimp industry.

The Commerce Department will issue final determinations on tariffs for shrimp producers in China and Vietnam on Monday, and for Thailand, India, Brazil and Ecuador in December. The tariffs would take effect in February. Not all shrimp-exporting countries would be affected.

It's widely expected that the tariffs will be imposed. The Commerce Department has found evidence of dumping in most of the cases it's investigated. Foreign exporters frequently complain about what they consider to be the department's bias in favor of domestic industries.

How much more shrimp would cost if the tariffs are imposed isn't clear.

Since the preliminary tariffs were announced in July, U.S. shrimp prices have increased slightly. Imports from countries that are expected to get tariffs have dropped in comparison with the same period last year, while imports from countries that weren't investigated have increased.

September shrimp imports were about 20 percent below what they were in the same month in 2003, according to National Marine Fisheries Service data, although shrimp importers were also affected by the hurricanes that battered the Southeast.

Wally Stevens, the president of the American Seafood Distributors Association, pointed to shrimp price increases after the announcement of the anti-dumping investigation in July and argued that consumers would be the first to suffer.

But many seafood industry analysts disagree. Some argue that nations saddled with hefty tariffs probably will bow out of the U.S. market, to be replaced by nations not targeted in the investigation, such as Indonesia and Mexico. Others suggest that grocery stores and restaurant chains most likely would absorb the rising prices.

The American shrimp industry asked the government for help last December.

"We didn't really have a choice," said Eddie Gordon, the president of the Southern Shrimp Alliance, an ad hoc American shrimpers' coalition. "We're talking billions of dollars that are going to be lost if the (American) shrimpers go out of business."

Since the late 1990s, shrimp has gone from a pricey gourmet item to America's most popular seafood, thanks largely to cheap imports. Prices have dropped by half since 2001. White shrimp, a popular variety, sells for an average of about $3.60 per pound wholesale this month. It's become so inexpensive that even budget chains such as Dairy Queen and International House of Pancakes have it on their menus.

The main factor driving shrimp into the mainstream has been the rise of shrimp-farming operations in dozens of countries, mostly in Southeast Asia and Latin America.

Almost all American shrimpers haul in their catch the old-fashioned way, piloting trawlers out into the Gulf of Mexico and the Atlantic Ocean and returning with nets full of wild shrimp.

In contrast, very little of the shrimp supplied by major exporters such as Thailand and China is wild-caught. Foreign producers rely on "farms" made up of large networks of pools in coastal areas, where shrimp are harvested in a manner more akin to soybeans than seafood.

Shrimp consumption has increased more than 70 percent in the United States in the last decade, and the vast majority that Americans eat is imported.

American seafood importers and other proponents of the foreign shrimp industry say the shrimp farms have out-competed the fishing-based domestic industry.

American shrimpers "are competing against aquaculture," said Kenneth J. Pierce, a trade lawyer representing the Thai Frozen Foods Association and other defendants in the Commerce Department case. "It's the hunter versus the farmer, and throughout history the farmer has always won that fight."