Casualties mount in shrimp trade war, but us consumers are not among them: importers suffer, along with producers and exporters from countries hit with anti-dumping duties. The price of shrimp sold in some US retail markets is now as inexpensive as chicken.
'In the past the only time we hired a lawyer was to collect an unpaid bill or to represent us when there was a major problem in the industry. But now we have to consult with attorneys every other day," complained Morton Nussbaum, summing up the frustrations felt by importers of shrimp into the USA market.
Long gone are those good old days of yesteryear yes·ter·year
1. The year before the present year.
2. Time past; yore.
yes , when shrimp was a completely duty-free commodity, and simple supply and demand economics ruled in a marketplace that sourced approximately 75% of its requirements (a billion pounds' worth) from abroad. Life is a lot more complicated now, and the American appetite for imported shrimp has increased to 1.3 billion pounds--amounting to 85% of total consumption.
For the third year running the vagaries of "anti-dumping law anti-dumping law Health law Any legislation enacted to prevent the inappropriate transfer of Pts who are medically unstable–eg, in early labor, or with impending rupture of aortic aneurysm, to other health care facilities. See Dumping. " formulation, arcane calculation of dumping margins by by the US Commerce Department, and the disorder it has wreaked upon shrimp importers, was the main focus of the Boston Seafood Show's Annual Shrimp Forum on March 13. And for the second year in a row, Nussbaum, chairman and ceo of West Newton West Newton is the name of various locations:
(2) (Information Management System) An early IBM hierarchical DBMS for IBM mainframes. IMS was widely implemented throughout the 1970s under MVS and continues to be used under z/OS. ), articulated the shrinking importing community's business difficulties with sharp wit and a spirited sense of gallows humor gallows humor,
n a dark or morbid sense of humor unique to people who deal with suffering and tragedy—for example, patients who are terminally ill joking about their illness or death as a means of coping with the illness. that was all too serious.
"The duty was established to protect domestic producers and the market has gone down--not up. This year, when domestic producers had their biggest production in years, I couldn't find an attorney willing to take my case to bring a dumping case against them for bringing down the US market by dropping prices," lamented Nussbaum. "I just don't get it."
There was no shortage of top-flight legal talent available to argue before the US International Trade Commission (ITC ITC (Brit) n abbr (= Independent Television Commission) → Fernseh-Aufsichtsgremium
ITC n abbr (BRIT) (= Independent Television Commission) → ) in 2004 that producers from six countries were selling shrimp at prices below the cost of production, and that establishment of anti-dumping duties was needed to protect the struggling domestic industry. The ITC agreed several years ago, by a vote of 6-0, that lower-priced, farm-raised shrimp from China, Vietnam, Thailand, Brazil, Ecuador and India was hurting US shrimp fishermen and processors. Implementation of anti-dumping duties by the US Commerce Department soon followed. In addition, the US Bureau of Customs and Border Protection acted to guarantee availability of cash to pay parties determined to have been injured commercially by exports from companies based in the half-dozen nations deemed to have "dumped" shrimp onto the US market at prices below those charged consumers or further processors in the country of origin. This was done by requiring importers to continuously post bonds equivalent to estimated duties on an entire year's worth of imports, which is extremely costly.
"Make no mistake about it, this is a massive trade war, and it is going to be looked at and analyzed for 10 years," said Michael Cone, a Shrimp Forum panelist and attorney with New York- and Washington-based Neville Peterson LLP LLP - Lower Layer Protocol , a firm specializing in international trade regulations. "Everybody is losing. People are getting out of the business of importing. They are purchasing on a landed duty-paid basis. The exporters are delivering it and paying the duties, and that's it."
Cone went on to say that this is ultimately bad for Customs and the US Treasury. "They might get that bond, but they're not going to get to attach assets," he commented. "We know of people who have been caught in trans-shipment, and they live very well in Vietnam--where Customs can't go after them. It's very sad what's happening. Nobody wants the domestic importers to lose out to people who are selling on an LDP LDP - Linux Documentation Project (landed duty paid) basis."
Urging importers to perform due dilligence See due diligence. , the attorney noted that a numer of companies have received notice from Customs that they are suspected of having received transshipments of shrimp product from Indonesia that originated in China, where the anti-dumping duty averages 112.81%.
"If offered a low price, grab your wallet and run for the nearest door, because it could well be a transshipped product," he warned. "If hit with a penalty action, you need to take it very seriously."
Morton Nussbaum elicited laughter from members of the panel and audience when he suggested that a Green Card program is needed for shrimp imports.
"I want to find out if there's a way to determine if shrimp has traveled around the world," he stated. "Scientists say that all human life began in Africa. Maybe all shrimp life began in Thailand."
The IMS chairman, a seafood business veteran, said that his company does all the due dilligence that it can. However, this may not be enough.
"If we do everything that is required, and someone takes a load of shrimp from China and ships it to Indonesia where it is mixed into his own production, and Customs suspects it, we have to pay the duty," he commented. "So, no matter what we do, unless we station our own people overseas, it doesn't matter. We still have to pay the duty, though the penalty may be waived."
Cone replied: "That's correct. With the right attorney, you won't have to pay the penalty. It's always been that way."
Nussbaum pointed out that profit margins for importers "are getting squeezed as we get pushed and pushed ... Our margins are shrinking ever year. The number of distributors is going down. It's not that there are fewer companies left making more money ... The guys who are left are making less money. Something is wrong here."
Shrimp farmers are feeling the squeeze too, as global supplies--most of which is produced in Southeast Asia--has reached 2.8 million metric tons.
"Producers in the Western Hemisphere Western Hemisphere
Part of Earth comprising North and South America and the surrounding waters. Longitudes 20° W and 160° E are often considered its boundaries. are having a difficult time now being able to produce at a price that allows them to stay in business," said panel member William More, director and vice president of the Aquaculture aquaculture, the raising and harvesting of fresh- and saltwater plants and animals. The most economically important form of aquaculture is fish farming, an industry that accounts for an ever increasing share of world fisheries production. Certification Council, which is based in Kirkland, Washington Kirkland is a city in King County, Washington, United States. It is a suburb of Seattle located on the Eastside (of Lake Washington). As of April 1, 2005, the city had an estimated population of 45,740, making Kirkland the eighth largest city in King County and the eighteenth .
"With rising costs and profits for the producer going down, it has reached a point where I think if prices continue to be flat, which is the projection, you will see a lot of producers go out of business," added More. "And you will see a lot more consolidation than in past years."
Illustrating just how cheap Pacific whites (Peneaus vannamei) have become in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. retail market, Steve Hedlund, moderator of the Forum, remarked: "It's amazing a·maze
v. a·mazed, a·maz·ing, a·maz·es
1. To affect with great wonder; astonish. See Synonyms at surprise.
2. Obsolete To bewilder; perplex.
v.intr. , shrimp prices are as inexpensive as chicken today."
Nussbaum could not resist the opportunity to let that statement pass without comment.
"I think the chicken people are going to sue us, because we are taking away their business," he joked. "People are switching from chicken to shrimp because of low prices!"
On the positive side of the ledger, suppliers are fetching higher prices for black tiger Black tiger may refer to:
RELATED ARTICLE: IMS launches new DelicaSea brand along with legal sea foods retail packs.
West Newton, Massachusetts West Newton is a village of the City of Newton, Massachusetts and is one of the oldest of the thirteen Newton villages. The Zip Code 02465 roughly conincides with the village limits. , USA-based frozen seafood supplier International Marketing Specialists (IMS) has launched DelicaSea, a line of consumer shrimp and squid products. The brand will initially include 15 shrimp items and one squid product, ranging from peeled and cleaned tail-on cooked black tigers and easy-peel shell-on whites, to cleaned calamari.
"DelicaSea is positioned as a premium line of both raw and cooked frozen shrimp and squid products for the foodservice and retail categories," said Morton Nussbaum, chairman and ceo of IMS. In addition to DelicaSea, IMS has introduced three new retail packs under the Legal Sea Foods restaurant chain brand name: Gourmet Breaded Butterfly Shrimp, Jumbo Cocktail Shrimp, and Cooked Salad Shrimp. Each features farm-raised product sourced from Thailand.
Legal Sea Foods, a restaurant and oyster bar Noun 1. oyster bar - a bar (as in a restaurant) that specializes in oysters prepared in different ways
bar - a counter where you can obtain food or drink; "he bought a hot dog and a coke at the bar" business with roots in Boston dating back to 1950, operates 30 outlets in the Eastern United States extending from the New England New England, name applied to the region comprising six states of the NE United States—Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, and Connecticut. The region is thought to have been so named by Capt. region to Florida. The second-generation family enterprise is run by Roger Berkowitz Roger Berkowitz is the President and CEO of Legal Sea Foods, Inc., a Boston-based restaurant group that boasts over 30 restaurants along the Eastern Seaboard. Roger started working in his family's fish market at the age of 10 and learned every aspect of the business. .
JOHN M. SAULNIER
QFFI QFFI Quick Frozen Foods International Chief Editor & Publisher