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FTA Ecuador - China Takes Effect Amid Unfavorable Conditions for Ecuadorian Shrimp

CHINA
Tuesday, April 30, 2024, 07:00 (GMT + 9)

China's import tax rate on Ecuadorian shrimp HS code 0306170 will be reduced to 0% under the terms of the bilateral free trade agreement.

China will eliminate tariffs on frozen shrimp imported from Ecuador starting May 1, 2024, the Chinese Ministry of Finance announced on Thursday (April 25).

Source: HKTV Mall 

The tax rate on Ecuadorian shrimp, HS code 0306170, will be reduced to 0% under the bilateral Free Trade Agreement (FTA) between the two countries that takes effect next month.

In 2024, China applies a temporary 2% tariff on imported frozen shrimp, exempting countries with existing FTAs. Thursday's announcement aims to "further promote the potential for bilateral trade and investment cooperation between China and Ecuador," the ministry said.

But even as import tariffs fall, some Chinese shrimp importers see the strong recovery of domestic shrimp farms as a growing long-term threat to their business.

Source: wx4.sinaimg.cn -->

Imported shrimp prices in April due to the decrease in Chinese farmed shrimp prices. He also noted that Ecuadorian shrimp prices in April did not reach the highs in March.

It is difficult to deny the relationship between imported shrimp prices and domestic shrimp prices. The price of 40/50 sized shrimp from a major Ecuadorian exporter has decreased from 440 CNY(USD 60.66)/12 kg box in March to 432 CNY (USD 59.56) in April.

Behind importers' worries is the rapid development of shrimp greenhouses across China's coastal provinces. According to one estimate, there are now more than 100,000 such facilities scattered across rural China - double the number just two years ago.

Domestic shrimp production increased as Chinese customs data showed a decline in imports. Frozen shrimp imports in March decreased by 30.3% compared to last year to 71,900 tons. March imports from Ecuador fell even more sharply, down 33.1% to 55,700 tons.

While the greenhouse shrimp farming boom has helped reduce prices for Chinese consumers, importers fear growing domestic production will continue to impact their market share.

Source: Beautiful Places in China

A Shanghai importer said: “We pay close attention to the production cycle in places like Jiangsu province. Many importers are wary of what will happen as each harvest hits the market.

Quanlian Jicai, China's largest shrimp importer, offered a positive view of the trade deal, predicting the tariff cuts would make Ecuadorian shrimp more competitive for Chinese consumers.

However, the company admitted that “there will be a large amount of shrimp harvested” domestically during the upcoming May 1 Labor Day holiday, a major retail event in China.

Source: Vasep (Translated from the original in Vietnamese)

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