Malaysian shrimp industry will lose RM511million if US anti-dumping duty is imposed

Updated: Monday September 2, 2013 MYT 6:56:47 AM

M’sian shrimp industry will lose RM511mil if US anti-dumping duty is imposed

BY DAVID TAN
DAVIDTAN@THESTAR.COM.MY

The next concern for the local shrimp industr y is the European Union’s preferen tial tariff of about 4% enjoyed by Malaysian shrimp producers

GEORGE TOWN: The local shrimp industry stands to lose over US$155mil (RM511mil) in revenue per annum should the United States’ proposal to impose a 54.5% anti-dumping duty on Malaysian shrimps take effect on Oct 1, 2013. Malaysia Shrimp Industry Association president Syed Omar Syed Jaafar told StarBizthat shrimp exports to the United States comprised 43.84% of Malaysian shrimp sold overseas, indicating that the United States is a major market.In 2012, 27,468.77 tonnes of Malaysian shrimps were exported to the US market, while the total local output was 65,000 tonnes.

The anti-dumping duty was proposed because the US Department of Commercebelieves that Malaysian shrimp producers were involved in exporting shrimps of non-Malaysian origin using Malaysian-origin certificates, also known as transshipment activities, Syed Omar said.

“The local consumption of shrimps in Malaysia is between 36,000 tonnes and 45,000 tonnes per annum. Combined with the exports to the United States, Europe and Asia-Pacific market, the figure would be more than the total volume of shrimps we produce per annum.

“This is the basis for the belief that we are passing off shrimps of non-Malaysian origin into the US market. The US authorities also believe that Malaysian shrimp producers were heavily subsidised, which explains the competitive pricing of our shrimps in the international market.

“The subsidy allegation is not true at all,” he said.

Malaysia has up to Sept 19 to appeal to the International Trade Commission against the anti-dumping duty.

Syed Omar said the US had given the names of seven local shrimp-producing companies believed to be involved in the repacking of non-Malaysian shrimps for the US market using Malaysian-origin certificates to the relevant Malaysian authorities.

“But no action has been taken against them, resulting in the US authorities being very unhappy with Malaysia.

“The seven Malaysian shrimp producers also did not take part in an audit on their shrimp-production capacity by US authorities. The audit would clear them and allow them to export to the US market without facing anti-dumping duties,” he said.

So far, only one foreign-owned, shrimp-producing company in Malaysia has been audited and cleared by the US authorities to export to the United States at a duty of 10.8%.

The other shrimp-producing companies are now taking steps to be audited and cleared by the US authorities, according to Syed Omar.

There are some 23 shrimp-producing companies in the country.

The next concern for the local shrimp industry is the European Union’s (EU) preferential tariff of about 4% enjoyed by Malaysian shrimp producers exporting to the EU.

“The preferential duties will expire in January 2014. If the EU is convinced that Malaysian shrimp producers were heavily subsidised and were involved in exporting non-Malaysian shrimps, then they too may revise the tariffs on Malaysian shrimps,” Syed Omar noted.

This year, the projected output of shrimps in Malaysia is expected to be around 70,000 tonnes to 75,000 tonnes, Syed revealed.

He added that the United States and EU moves would be detrimental to genuine Malaysian shrimp exporters as a result of the anti-dumping tariffs and called on the authorities to look into the matter.

“Action should be taken against the companies which are involved in transshipment activities. The anti-dumping duties would drive away new investments, as we would not be able to compete with other neighbouring countries,” he said.