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August 17, 2013

The World

Main Stream Media Reports on Shrimp Farming

 

Shrimp farming rarely gets the attention of the main stream media in the United States, but in mid-July 2013, the Wall Street Journal, the leading financial newspaper in the United States and probably the world, carried an article on the shrimp disease epidemic in Southeast Asia and the soaring shrimp prices in the United States.  More recently the Financial Times, a British newspaper with a readership of 2.2 million people worldwide, and CNN Money, a website of the Cable News Network, Fortune Magazine and Money Magazine, reported on the Department of Commerce’s subsidy case against several shrimp-farming countries and the soaring shrimp prices in the United States.

 

In an article that was published before the Department of Commerce’s August 13, 2013, ruling in the subsidy case, the Financial Times reported: “American shrimp producers from the Gulf of Mexico are asking the USA government to slap duties on $3.4 billion of annual imports from seven developing countries including Thailand, Indonesia and India in an effort to thwart what they see as damaging competition driven by illegal subsidies.”

 

“The USA shrimp industry’s case rests on the charge that the seven countries have used government grants, low-cost loans and tax breaks to subsidize their shrimp exports, undercutting USA domestic prices and causing them harm.  ....Carson Kimbrough, a large shrimp producer from Bon Secour, Alabama, said...‘The big damage to my company came from the mass invasion of import competition seizing my customer base with the perception that my shrimp was tainted, and their shrimp was not.  They made a huge effort to dominate our market, and they were very successful with it.  It’s driven both the boat industry and the shrimp processing business into disarray.  We’ve lost a lot of fishermen and we haven’t been able to maintain our equipment properly.’”

 

In an article that was published after Commerce's, ruling on the subdisdy case, CNN Money reported: “You may have to skimp on the shrimp this summer.  Shrimp prices are skyrocketing to all-time highs, amid a disease that’s plaguing the three largest prawn producers: Thailand, China and Vietnam.  White shrimp prices are nearing $6 a pound, up 56% from a year ago, according to an Urner Barry index.”

 

“Thailand is the world’s largest shrimp producer and has been hit hardest by the disease.  The country alone supplies about 30% of the tropical shrimp in the United States and the European Union and is expected to see its supply cut in half this year.”

 

“Back in June, Darden Restaurants (DRI, Fortune 500), the parent company of Red Lobster, Olive Garden and other chains, noted higher food costs partly due to “shrimp supply disruptions” could cut into future sales.  Seafood alone accounts for about a quarter of Darden’s total cost of goods sold, of which shrimp is the most popular protein.”

 

“...Disease isn’t the only thing pushing shrimp prices higher.  ...The Commerce Department ruled on August 13, 2013, that China, Ecuador, India, Malaysia and Vietnam have all unfairly subsidized shrimp that’s exported to the United States.  The ruling could lead the USA to enact duties on shrimp from some of those countries, leading to even higher shrimp prices.”

 

Sources:  1. Financial Times [Eight free articles a month for registered readers, but registration is a bit of a pain.]  US Shrimp Industry Seeks Import Duties to Thwart Foreign Producers James Politi  (in Washington, DC).  August 12, 2013.  2. CNN Money.  Shrimp Shortage Leads to Record High Prices.  Annalyn Kurtz.  August 16, 2013.

 

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