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Each day TFO Canada publishes a sample of trade news on the Canadian import market along with any new, updated or changed regulations and legislations regarding international trade; countries in which TFO Canada offers services and on the export sectors which it promotes.

 

Shrimp sector expectantly awaits trade agreement with EU

Wednesday, July 06, 2016 > 09:50:51
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Ecuador exported about 76 million pounds of shrimp in May, a record amount in the sector’s productive history, according to the president of the National Aquaculture Chamber (CNA), Jose Camposano.

Despite considering that 2016 is a "difficult year" for the Ecuadorian shrimp industry, the leader said that there has been a growing trend of the product being processed and exported in the first five months of this year, and said the investments needed to produce more have been made.

But he also stressed that there was a downward trend in international prices, although there were some favorable behavior in recent days.

"Shrimp prices have been falling for 36 months, making it difficult because it is necessary to counter the volume with the drop in turnover," he said during an interview with El Diario.

Camposano added: "We estimate that this year there will be a reduction, so we insist that it is very painful and it is a strong blow to the shrimp farming activity to have an advanced income tax when sales in the productive sector follow a downward trend."

Regarding the impact of the earthquake that shook the country, the president of the CNA said about 12,000 hectares were affected, with damage ranging from total involvement to pools that require minor reconstructions.

As some areas had already been stocked, apart from losses in infrastructure, capital was lost. Manabi contributes 8 per cent of the total export volume, he said.

On the other hand, Camposano said in a statement to El Telegrafo that it is expected for next week that the translations of the text of the trade agreement between the bloc and Ecuador have already been sent to the member countries of the European Union, after which a consultation process ending on August 22 will start. If there are no objections, the agreement would be automatically approved to be signed by the European Commission.

The next step would be the approval by the European Parliament and the National Assembly of Ecuador.

In the event that during the consultation period an objection is raised, Camposano explained that the European Council would vote for the adhesion of Ecuador and the adoption of the text would be by simple majority.

For the sector, the non-approval of the trade agreement would represent a loss equivalent to 10 per cent of FOB value of exports. In this regard, he said that Ecuador exports products to the EU for a value ranging between USD 700 million and USD 800 million annually.

This implies that if a trade agreement with the EU is not achieved, the shrimp sector could have a prejudice of up to USD 7 million a month.

"In six months we can lose tariff preferences. We hope that the trade agreement is a fact because it would mean not to pay a 12 per cent tariff," he added.

According to what the official told the newspaper El Telegrafo, the available figures indicate that in 2014 there were some 220,000 hectares of shrimp farms, a little over 3,000 producers and about 3,070 farms. In 2015, shrimp production reached 750 million pounds, which were processed and exported to more than 50 markets worldwide and generated USD 2.3 billion in revenue.



 


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