India is the largest supplier of shrimp products to the United States, and the relevant industry is in trouble as it is about to face a heavy pressure of a 26% tariff.

[By Guancha Observer Network, Xiong Chaoyan] The current turmoil caused by this rampant tariff trade war may shake the global shrimp export trade to the United States.

According to a Reuters report on April 14, in India, the largest supplier of shrimp products to the United States, exporters said that currently about 2000 full containers of frozen shrimp are at risk of being stranded. Meanwhile, thousands of kilometers away in South American country Ecuador, which enjoys a lower tariff rate, is expected to benefit from it. Exporters in the country said that shrimp is the second largest export commodity after oil in Ecuador.

Although U.S. President Trump has granted a 90-day moratorium on imposing so-called "reciprocal tariffs" on some trading partners, according to policies that will be implemented in July, India's shrimp industry will face a heavy tariff pressure of 26%, directly threatening the $7 billion seafood export market that heavily relies on procurement by American chain supermarkets such as Walmart and Kroger. At present, buyers are demanding renegotiation of prices.

A shrimp product exporter who wished to remain anonymous said that if the 26% tariff rate takes effect in July this year, then the Indian shrimp industry "would be finished." This exporter revealed that he is negotiating with U.S. customers who are unwilling to fully bear the 10% tariff, and if he has to sell 130 already packed containers, there is even a risk of not making a profit.

On April 10, in an Indian shrimp processing factory, a worker was placing shrimp into baskets for quality inspection. Reuters.

It was reported that due to the sudden drop of 10% in exporters' quotations since the introduction of the tariff policy, farmers are suffering from a shortage of demand under the influence of policy uncertainty.

"We are suffering huge losses," said S.V.L. Pathi Raju (63), a shrimp farmer in the coastal region of Andhra Pradesh in southern India. "We don't know who can solve our price problem." It was reported that Raju's family lives in a remote village in the state and is one of the families facing a continuous decline in export sales.

It was reported that industry representatives have joined a special task force of the state government to jointly assess the impact of tariffs and seek ways to open up other export markets such as China.

Exporters are concerned that Ecuador will gain a competitive edge thanks to the 10% preferential tariff that Trump plans to implement on the country, especially considering its closer geographical proximity to the United States, which is Ecuador's second largest shrimp export market.

However, producers in Ecuador, which achieved $1.55 billion in exports last year, are not overly optimistic either. Jose Antonio Camposano, chairman of the Ecuadorian Aquaculture Chamber, said that although U.S. demand for processed shrimp has driven production growth in Ecuador, the country's capacity has yet to reach the level needed to replace India.

Camposano added that India will be forced to turn to other markets where Ecuador is already selling, such as China and the EU, thus putting Ecuador under greater competitive pressure in those markets.

Reuters pointed out that every year, tens of thousands of tons of frozen shrimp depart from Andhra Pradesh, India, and after a 40-day journey, arrive at ports in New York, Houston, and Miami, USA, before being sent to restaurants and shelves of retailers such as Safeway and Costco.

G. Pawan Kumar, chairman of the Indian Seafood Exporters Association, said he is worried that, due to the new tariff policy, American buyers now want to renegotiate prices for containers already filled with frozen products at previously agreed prices.

"The 10% tariff is too high; our exporters' profit margins are usually only 3% to 4%." The association led by Kumar is urging the Indian government to secure tariff exemptions for the industry in trade negotiations with the United States. The 10% tariff rate mentioned by him is the so-called "benchmark tariff" that Trump still retains after announcing a 90-day moratorium on imposing "reciprocal tariffs."

This article is an exclusive contribution by the Guancha Observer Network and cannot be reprinted without permission.

Original source: https://www.toutiao.com/article/7493102435913941541/

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