The average American consumed 4.2 pounds of shrimp in 2011, with about 3.5 pounds of the crustacean imported from foreign fisheries.
By 2014, those import and consumption levels could plummet because of action by the U.S. government and disease in Thai shrimp farms, which has wiped out 30 percent of that nation’s shrimp harvest.
The Coalition of Gulf Shrimp Industries, an industry group of U.S. commercial shrimp fishermen, asked two government entities to impose import sanctions on shrimp imports from seven countries — China, Ecuador, India, Indonesia, Malaysia, Thailand and Vietnam — arguing they give billions of dollars in subsidies to their domestic industries each year. The seven countries account for 85 percent of U.S. shrimp imports and more than 75 percent of the entire domestic market.
The coalition’s filing listed what it says are more than 100 individual examples of subsidies by foreign governments.
Based on the arguments, the U.S. International Trade Commission and the Department of Commerce agreed to study the industry, with separate decisions expected at the end of the year.
Of the 1.1 billion pounds of shrimp imported in 2011, the seven countries shipped 984 million pounds worth $4.3 billion, and the coalition said it was able to document more than $13.5 billion spent by the seven governments to the aquaculture and seafood processing industries in their countries, with the shrimp industry the primary recipient.
The coalition said the subsidies include “direct government grants and equity infusions, cheap loans, debt forgiveness, tax breaks, the direct provision of land, shrimp feed, and other key inputs, as well as numerous export subsidies.”
Subsidy examples include:
— The government of Thailand buys shrimp from farmers and provides that shrimp to processors at artificially low prices.
— The Indian government provides subsidies to reduce shrimp processors’ ocean freight costs, with an added subsidy specifically for exports to the U.S.
— In China, the government provides financing to build what it hopes will be the world’s largest shrimp processing and export platform.
If the coalition is successful in having countervailing duties imposed, shrimp prices would increase substantially and imports would drop.
In the trans-Pacific, U.S. refrigerated exports outnumber imports by about 2.5-to-1. Shrimp imports are an important commodity to ocean carriers because the large volume and steady flow helps reposition the reefer boxes to the U.S. without an empty haul by the carriers.
Overall, carrier representatives say the seafood market remains solid. In fact, seafood shipments offer two-way business to the carriers, because a substantial volume of seafood caught in the Pacific Northwest and Alaska is shipped to Asia to be processed in factories there and then shipped back to the U.S. or to Japan or Europe.
With labor costs rising in China, there had been speculation that the processing and re-exports to the U.S. and other major markets would slow, but industry interests haven’t seen evidence of it.
“I don’t really think reprocessing fish in Asia has slowed,” said Vince Rankin, APL’s director of refrigerated trade for the Americas. “We have a lot of fish from Alaska, and we’re still taking it to Asia. If it’s not being done in China, maybe it’s being done in Korea or Vietnam. That work follows labor rates, but I don’t think it’s moved far.”
Larz Malony, manager of the international section of Pacific Seafood Group, said his company’s approach to processing hadn’t changed. “The big change in the market has been the slowing in Europe,” he said. “There are various challenges in the (European Union) economies. Plants in China do a huge amount of processing whether from fish caught in the U.S. or elsewhere. A lot of that would normally end up in Europe, but demand there has slowed.”
He acknowledged, however, that China faces overcapacity and is shutting some plants. “From our perspective as a company, we might choose to hold on to more of our fish to process in our own plants than we would in other years,” Malony said. “We always try to do as much of that as we can. But in the fisheries when there are huge amounts, it has to be processed quickly. We just wouldn’t stop working in Asia if we need the capacity.”
The Food and Drug Administration is expected to announce new food safety regulations for imported foods within the next few months, something Malony said is keeping the company busy. “When we work with a plant overseas, we don’t make an agreement with them until we know that we can develop a program for reprocessing that meets our specifications for food safety,” he said.
Market trends this year include a sharp decrease of about 35 percent in sardine sales, but other industry segments are increasing, Malony said. “It’s a good year in salmon, and we’re seeing good export shipments,” he said. “I think overall we feel somewhat positive about it. The complicating factor will be currency issues. We see a strengthening euro and a weakening yen.”
Malony predicted 2013 would be “a decent year for us. One thing that will affect our sales is the fairly aggressive rate increases by ocean carriers. We do our business in huge volumes and very thin margins. Profit is made through the volume. If you add $500 or $1,000 a container, we couldn’t make a profit.”
Another trend is the return of Chile to the salmon export market. Chile had been the top supplier of salmon to the U.S. until 2008, when the industry was hit by infectious salmon anemia.
Overall U.S. salmon imports soared 40 percent in the first 11 months of 2012 to 185.4 million pounds, 55 million higher than a year earlier, and the highest level since 2005, according to the Commerce Department. Imports from Chile led the surge, rising 75 percent to 144.7 million pounds.
Contact Stephanie Nall at email@example.com.