The Hindu Business Line : Shrimp exporters’ $50 m stuck in US

Kochi, Nov. 4 An outstanding amount of about $50 million in bonds is still pending with the US Customs Department as it has not been liquidated in favour of Indian exporters.

During 2005-06, Indian exporters had to execute close to $20 million as bonds for shrimp exports of Rs 950 crore to the US at the rate of 10.17 per cent, Mr Anwar Hashim, President of the Seafood Exporters Association of India (SEAI), said.

In the subsequent years, the value of exports and the rate of anti-dumping duty and custom bonds executed by Indian exporters have been falling. Exports fell to Rs 800 crore entailing a 7.22 per cent duty, which would have required customs bond worth $11.55 million in the succeeding year. In 2007-08, the exports fell to Rs 750 crore at 1.69 per cent entailing close to $2.55 million as bonds. Shrimp exports to the US shrivelled to Rs 611 crore in 2008-09 and the bond requirement fell to 0.79 per cent.

While Indian shrimp exports to the US may not confront such dismal days anymore, several exporters have complained that their liquidity positions have been undermined as bonds worth several millions of dollars have been pending with the US Customs Department for several years.

Stricter Vigil

The problems of the Indian seafood exporters are expected to multiply as more strict and vigilant control regime is being enforced from the processing factories to the handling centres and fishing harbours to fishing boats and even fishermen.

The evidence of the extension in vigil is the latest ruling from the EU making it mandatory for all seafood exports to the union to be accompanied by a catch certification from a competent Government agency.

In the recent past, rejections by health authorities in the US and the EU on detection of antibiotic residues in cultured shrimp from India have also been on the rise. Similar concerns have also been voiced by Japan, another major seafood export destination for India.

During 2008, the rejections of shrimp consignments from India due to the detection of antibiotic residues were more than 30. These rejections have grown exponentially to 50 during the first seven months of the current year. The rejections also happened because EU countries do not have a harmonized procedure for acceptance of cargo or removal of an importer from their “rapid alert list” if the exporter had faced a consignment rejection.

The levels of antibiotic residue, which trigger rejection by the EU, have also been criticised as being too exacting, extremely rigid and beyond the actual requirement for food safety.

Mr Hashim appealed for a relaxation in the mandatory antibiotic residue levels to be on a par with those prevalent for wine and dairy products in the EU region.