US Tariffs Send Waves Through Global Shrimp Market

The savory world of shrimp in the United States is currently afflicted by a daunting wave of vigour due to the recently imposed tariffs, amounting to 50 percent in the last two weeks, preceded by a six-week tariff of 25 percent. This has created critical pressures on the shrimp ecosystem, resonating across the shrimp supply networks of the nation.

Not surprisingly, the hatcheries appear to be hit hardest as shrimp farmers cease to purchase the shrimp seed stock. Ravi Kumar Yellanki, at the helm of the All India Shrimp Hatcheries Association, quantifies the loss, estimating it to be nearly ?150 crore.

In the current predicament, shrimp farmers find themselves caught up in a whirlwind of uncertainty. Ambiguity about the potential of exporting their yields to the U.S has led to a decline in their acquisition of seed stocks.

The severity of the situation becomes apparent with revelations about the collateral damage. It is stated that this crisis prevented the sale of approximately 5 billion shrimp seeds. Given their fleeting shelf life of three to four days, these unsold seeds had to be disposed of.

Amid the turbulence, the forthcoming festive occasions such as Thanksgiving, Christmas, and New Year, bring a glimmer of hope to the exporters. This time of year typically has them securing larger orders to cater to the heightened demand.

India has an edge in this demanding landscape with its shrimp flavor profile aligning well with the palate preference of U.S. consumers. This unique advantage might aid them in overcoming the current challenges.

Indukuri Mohan Raju, the president of the Prawn Farmers Federation, reflects optimism by mentioning that the country has substantial orders planned till the 15th of November. The reason he points out is the buyers’ strategy of stocking up produce for the festivity that is imminent.

The tariffs have their ripple effects. As these high tariffs were introduced, marketplace price behavior witnessed a significant change. Traders were found dropping prices, with reduction being in the realm of ?80-100 per kg.

Much to their surprise, the Indian traders discovered that American traders seem to be absorbing the effects of the increased tariff, and might be indirectly transferring the expense to their consumers. Duggineni Gopinath, of the Southern Coastal Districts’ Prawn Farmer Association, underlines that they have not faced the expected adverse impacts yet, but the exporters did encounter a dip in prices.

Due to this escalating crisis, shrimp farmers across four districts in Andhra Pradesh convened for a comprehensive discussion. Andhra Pradesh holds substantial contribution to the country’s shrimp exports, contributing to about 50 percent of the country’s total shrimp exports, which stands at ?40,000 crore.

The primary concern of this congregation was the plea for governmental assistance. The shrimp farmers expressed their aspirations for the government to set a minimum support price for varying shrimp species, a range of ?250-400 per kg was proposed.

A parallel demand projected was for subsidized electricity costs. A rate of ?1.50 per unit was deemed reasonable and was thereby proposed as an ask from the government.

This combined plight of shrimp farmers and traders across the nation brings to light the significant trials faced by this key industry. The recent tariff imposition has redefined the consumption, demand, and supply dynamics of the shrimp market.

Nevertheless, the upcoming festive season offers a reprieve to these major hurdles. As consumers stock up for the celebratory times, an increased demand in shrimp is expected, offering a momentarily relief to the struggling shrimp industry.

This entire scenario underscores the interconnectedness of global trade and the far-reaching implications of economic policies. As the shrimp industry waits in the eye of the storm, it becomes evidence of how trade policies can quickly impact industries and the lives of people linked to them.