W13 Shrimp Update: US Lawmakers' Concerns Spark Debate on Indian Shrimp Imports, Implications for Japan's Market and Ecuador's Opportunity

Published 2024년 4월 9일

In W13 in the shrimp landscape, the US lawmakers are expressing concerns about shrimp imports from India due to reports of food safety issues, labor violations, and human rights abuses in India's shrimp processing industry. This has led to the introduction of the Keeping Safe Shrimp Act, aimed at ensuring fair trade practices. However, the Indian government, through the Marine Products Export Development Authority (MPEDA), denies these allegations, emphasizing India's adherence to strict regulations and ethical supply chain practices. Meanwhile, the US Department of Commerce (DOC) has announced preliminary findings of unfair subsidies benefiting shrimp exporters in India, Ecuador, and Vietnam, potentially leading to countervailing duties. This development could disrupt global shrimp trade patterns, with Japanese importers showing increased interest in Ecuadorian shrimp due to potential lower prices compared to Indian shrimp, amidst a shrinking overall shrimp market in Japan.

US Lawmakers Raise Concerns Over Indian Shrimp Imports, Citing Food Safety and Labor Issues

Several United States (US) lawmakers have expressed concerns regarding US shrimp imports from India. This action follows investigative reports raising questions about food safety, labor violations, and human rights abuses within India's shrimp processing industry. Lawmakers allege that Indian shrimp imports may not meet US health standards, potentially posing risks to American consumers. Concerns exist that artificially low prices of Indian shrimp are displacing domestically caught shrimp in the US market. The influx of potentially unfairly priced Indian shrimp is seen as detrimental to US shrimp producers. Reports also suggest potential labor abuses and human rights violations within Indian shrimp processing facilities. To address these issues, lawmakers introduced the Keeping Safe Shrimp Act on Aug-23. This legislation aims to ensure fair trade practices in the US shrimp industry.

The Indian government, through the Marine Products Export Development Authority (MPEDA), has strongly refuted the allegations. They maintain that Indian seafood production adheres to stringent regulations and undergoes rigorous inspections to guarantee compliance with international standards. MPEDA emphasizes the ethical nature of India's seafood supply chain and asserts that Indian shrimp will continue to be a preferred global choice.

The US Department of Commerce (DOC) recently announced preliminary findings of unfair subsidies benefiting shrimp exporters in India, Ecuador, and Vietnam. This could lead to countervailing duties being imposed. Concerns regarding food safety, labor practices, and potential trade imbalances have created friction in the US-India shrimp trade relationship. Further developments, including the DOC's final determinations and potential congressional action, will be crucial in determining the future trajectory of shrimp trade flow between India and the US. The accusations and proposed countervailing duties by the US could disrupt India's shrimp exports, a major source of revenue for the country. Negative publicity surrounding food safety concerns may also impact consumer confidence in Indian shrimp imports.

Potential Shift in Japanese Shrimp Imports as US Duties Impact Major Suppliers

The recent imposition of preliminary countervailing duties by the US on shrimp imports from India, Ecuador, and Vietnam is expected to have a ripple effect on the global shrimp market, with potential implications for Japan, a major shrimp consumer. The US decision to impose countervailing duties, ranging from less than 2% to as high as 196%, on shrimp imports from three of its main suppliers, India, Ecuador and Vietnam, is likely to disrupt established trade patterns. Japanese shrimp importers are reportedly showing increased interest in Ecuadorian shrimp, with imports rising by 4.5 times in the past five years, reaching 7 thousand metric tons (mt) in 2023. This trend is likely to accelerate due to the US duties and potentially lower prices compared to Indian shrimp. While demand from the US and China has weakened, shrimp prices in Ecuador have remained relatively stable, making them attractive to Japanese importers. However, Japan's overall shrimp market has been shrinking over the past decade, reaching a 40-year low of 200 thousand mt in 2023.

The specific 13.41% US countervailing duty imposed on Ecuador's Industrial Pesquera Santa Priscila warrants further investigation to understand its potential impact on the Japanese market. Declining shrimp inventories in Japan suggest a potential increase in import demand. However, consumer spending on shrimp has remained stagnant, creating a balancing act for importers. The countervailing duties imposed by the US on shrimp imports create an opportunity for Ecuadorian shrimp to expand its presence in the Japanese market. However, the success of this transition will hinge on various factors, including the resolution of duties on Ecuadorian companies, ongoing price competitiveness, and broader patterns in Japanese shrimp consumption.