Duties on Vietnamese catfish a start but may have come too late
by Ted Carter
Published: March 29,2013
A Commerce Department decision to put duties on frozen catfish fillets exported from Vietnam helps to level the competitive field but may have come too late to reverse a substantial decline in U.S. production.
The Commerce Department ruling is an about-face for the trade regulatory agency that has refused pleas from catfish producers in Misssissippi and elsewhere in the Mid South to slow what the producers say is massive dumping of pangasius catfish imported to the United States. The result has been a huge gap in the per pound selling price of the foreign and domestically produced catfish, U.S. producers say.
The dumping duties announced Thursday put a charge of 77 cents a kilo on the Vietnamese pangasius fillets.
The duties are to be enforced retroactively. Companies that shipped pangasius between August 2010 and July 2011, the Commerce Department’s most recent review period, will now get a bill from the U.S. government charging them 77 cents a kilo for the total amount they exported to the United States, reports the seafood trade Web site Intrafish.com.
In Mississippi, producers voiced relief that the Commerce Department had concluded the Vietnamese engaged in dumping at the expense of domestic producers. But much competitive ground remains to be made up, they say.
Import figures show what U.S. producers are up against. Catfish imports from Vietnam rose from 1.9 million kilos in 2003 to 103 million kilos last year, according to Intrafish. Much of the market loss has occurred since 2008, the U.S. industry reports.
In the meantime, Mississippi’s has “probably lost 50 percent of the farmers and acreage we had 4 yrs ago,” said Harry Simmons, owner of Simmons Farm Raised Catfish just west of Yazoo City. Simmons, who has raised catfish since 1976 and processed the product since the early 1980s, said he plans to stay in business, though at a significantly smaller scale than previously. “So many people are getting out,” he said in an interview after the Commerce Department ruling.
He said his processing plant is running at about 60 percent of its capacity. “Back in 2008 we were running perhaps 90 percent. That’s about the time imports really began to increase,” Simmons said.
Four years ago Simmons Catfish, which employs 250 people, processed about 680 million pounds of catfish. Last year that amount dropped to 300 million pounds, he said.
Simmons is happy to see an acknowledgement from Washington that a competitive imbalance exists.
“Certainly it is trying to level the playing field,” he said of the Commerce Department. “Our domestic industry is in shambles. They (the Vietnamese) will still be cheaper than we are. This is only a step in leveling.”
Tunica producer Bill Battle said he hopes the new duties will mark a step toward balanced competition but is not entirely sure. “I guess everybody has got their own idea of what it means,” said Battle, owner of Pride of the Pond Catfish.
“It’s a shot. Anything is helpful.”
U.S. Sen. Thad Cochran, newly elevated to ranking Republican member on the Agriculture Committee, said he met with Undersecretary of Commerce for International Trade Francisco Sánchez on March 4 to discuss the antidumping duty administrative review. Echoing Simmons and other Mississippi producers, Cochran called the Commerce action “a step in the right direction,” but emphasized the department “must continue to enforce our trade laws in future decisions.”
Cochran, who sponsored the 2008 Farm Bill requirement on imported catfish inspections, has been critical of what he says has been the federal government failure to implement a more stringent inspection process for imported fish products. The Obama administration should follow up the antidumping action by initiating “an inspection program that will ensure the quality of fish imports, particularly for imports marketed as catfish,” Cochran said in a press statement.
The key to the new market-dumping decision came with the switching of “surrogate” countries from Bangladesh to Indonesia in determining the cost of production and setting a fair market value for the product. With Vietnam being a communist, or “nonmarket,” country whose catfish industry is subsidized by the central government, the U.S. government can’t put a monetary value on how subsidies from Hanoi influence the cost of a pound of Vietnamese catfish fillets sold in the United States. Consequently, a surrogate country must be used as a basis for setting a fair market value. The fair market value is key because an exporter found to be pricing a product below that value could be deemed guilty of dumping and thus subject to extra import duties.
For the last several years, over the objections of U.S. producers, the Commerce Department has designated Bangladesh as the surrogate country. The tiny country on the India sub-continent produces an African variety of catfish known as Clarias gariepinus. The fish wholesales for 42 cents to 43 cents a pound, a price that does not reflect any subsidies from the Bangladesh government.
Vietnamese pangasius fillets go for around $1.50 a pound in U.S. markets, while catfish made in America wholesale at about $3.90 to $4 a pound.
With Indonesia as the surrogate, the government will estimate Vietnam’s cost of production at around 80 cents a pound, a price that will be reflected in the newly assessed tariffs, a Washington, D.C., trade attorney for the U.S. catfish industry said.
Domestic producers for several years have urged the U.S. government to designate either the Philippines or Indonesia as the surrogate country to bring a more realistic cost of production into any decision on anti-dumping measures.
The trade attorney said the Vietnamese are already making statements about circumventing the ruling by transshipping their catfish through other countries. Such a move, said the attorney, would be illegal.
While the ruling restores some competitive balance between domestic and foreign producers, consumers will see a near doubling of prices they pay for the Vietnamese produced pangasius, Intrafish reports.
Intrafish says prices could rise as much as 40 cents a kilo, the website said.
Simmons, the Yazoo City catfish producer, said he is unsure what led Commerce officials to change their long-held insistence on Bangladesh as the surrogate country, but added: “I am certainly encouraged that they went back to a more realistic country. I am real happy about that. I think it is going to help the domestic industry.”
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