The implementation of a bilateral Free Trade Agreement (FTA) between China and Ecuador is set to impact shrimp imports into China, effective May 1, 2024. Under this agreement, China will eliminate import tariffs on frozen shrimp from Ecuador, particularly focusing on HS code 0306170.

Tariff Reduction to 0%

As part of the FTA terms, the import tax rate on Ecuadorian shrimp will be reduced to 0%, aiming to facilitate trade and investment cooperation between the two countries.

The recent announcement by the Chinese Ministry of Finance reflects efforts to strengthen bilateral trade relations, emphasizing the potential benefits for Ecuadorian shrimp exporters in the Chinese market.

Challenges Amid Tariff Reduction

However, challenges remain within the industry. Chinese shrimp importers express concerns over the rapid expansion of domestic shrimp farming, which may impact the competitiveness of imported shrimp.

The decline in imported shrimp prices can be attributed to increased domestic production within China, particularly driven by the growth of shrimp greenhouses across coastal provinces.

Domestic Production Surge

Domestic shrimp production in China has risen, coinciding with a decline in shrimp imports as per Chinese customs data. Frozen shrimp imports in March decreased by 30.3% compared to the previous year, totaling 71,900 tons. Specifically, imports from Ecuador experienced a sharper decline, plummeting by 33.1% to 55,700 tons during the same period.

While importers acknowledge the potential benefits of tariff cuts for Ecuadorian shrimp, they also anticipate challenges during key retail events, such as the upcoming May 1 Labor Day holiday, due to a surge in domestic shrimp harvests.