Imports dominate Shrimp Forum

By

James Wright, Senior Editor

Published on
March 17, 2009

Americans consumed 4.1 pounds of shrimp per capita in 2007, more than any other seafood species. But with imports representing about 90 percent of the U.S. shrimp supply, there are no shortage of challenges facing importers in today’s market.

That was the overriding message of Tuesday’s Annual Shrimp Forum, held at the International Boston Seafood Show. Discussion topics ranged from the impact of the global recession on production and demand to ongoing economic integrity struggles to perplexing trade barriers and the related costs shouldered by importers.

Still, imported shrimp is a consistent and reliable product that feeds retailers’ and restaurateurs’ bottom lines.

“Shrimp retains a sense of specialness [sic] in the guests’ minds,” said Roger Berkowitz, president and CEO of Boston-based restaurant chain Legal Sea Foods. “We probably sell more shrimp than anything else. It plays a disproportionate role in terms of popularity.”

Berkowitz said the quality and consistency of farmed shrimp far surpasses that of wild domestic shrimp, so his business relies on imported product to meet its needs. “Quality and consistency are most important to me,” said Berkowitz, adding that quality and safety standards in Thailand and Vietnam are “incredibly high.”

However, there are numerous challenges — both economical and political — that importers must wrestle with, including the requirement to post continuous bonds in order to import shrimp from countries hit with tariffs resulting from an antidumping petition filed by the Southern Shrimp Alliance in late 2003. Some continuous bonds required by U.S. Customs and Border Protection that importers posted in 2005 have yet to be liquidated, resulting in millions of dollars in tied-up capital that could be better spent elsewhere.

“Importers who pay duties continue to be punished,” said Morty Nussbaum, chairman of International Marketing Specialists, a Newton, Mass., seafood importer.

“It’s a crime you have to respect laws that are unrespectable,” said Greg Rushford, editor of the international trade-focused newsletter The Rushford Report, published from Washington, Va. Rushford, who is critical of barriers to free trade, said the domestic industry is a victim of its own decision to pursue the antidumping lawsuit.

Susan Kohn Ross, an attorney with Mitchell Silberberg & Knupp in Los Angeles, disapproved of the U.S. Food and Drug Administration, which is responsible for policing imports for food safety and economic integrity concerns. She said the federal agency only devotes about 10 percent of its budget to inspect and regulate food imports, reserving most of its focus for the pharmaceutical industry.

“The FDA is clearly screwed up,” said Ross. “No question they could be doing a better job than they currently do. And they do realize they have problems.”

Unfortunately for shrimp importers, the FDA puts economic fraud on the back burner, leaving it up to seafood buyers to play the role of watchdog. The practice of selling product that is not 100 percent net weight continues, said Nussbaum, who decried the “cheater pack” practice that has occurred for several decades. This is when a 10-pound box of frozen shrimp with 25 percent glaze is sold to buyers — and ultimately consumers — as 12.5 pounds of shrimp.

“The only way you’re going to see any action is by sending [short-weighted product] back,” said Berkowitz.

But Nussbaum added that price, not quality, is still the deciding factor in many buyers’ minds.

“When price is the determining factor, you have to be concerned about quality,” said Ross.

Regarding supply and demand, the panelists agreed that demand for shrimp remains strong despite the challenging economic climate in the United States and worldwide.

 

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