The US International Trade Commission imposed duties on shrimp imports from six Asian and South American countries last week, in the final stage of a trade dispute that has been blamed for high glucosamine prices.
Shrimp shells are the main raw material for the joint health supplement, which is currently growing by around 10 per cent annually. Around 90 per cent of the ingredient comes from China, where booming shrimp farms have provided a ready source of raw material over recent years.
Indian supplies are the predominant source for European customers owing to a European Commission restriction on Chinese seafood imports following contamination with antibiotics.
But shrimp industries in both countries have now been hit with anti-dumping tariffs, making the current high prices for glucosamine likely to continue into 2005.
The opening of anti-dumpting investigations last February has already had a major impact on shrimp farming, with the proposed tariffs halving shrimp meat prices, according to the main Indian glucosamine manufacturer Pharmed Medicare. This left little incentive for farmers to continue shrimping and has resulted in a severe shortage of glucosamine raw materials.
The Indian company says the tariffs are the main factor behind glucosamine prices reaching close to $20 per kg in December, up from only $5 in February last year.
Concerns about the possible impact of the recent tsunami on India's shrimping industry may warrant "a changed circumstances review", said the ITC, but while this is under consideration - a process that can take about four months -the glucosamine market continues to grow by around 8-10 per cent in the US and more than 15 per cent in Europe and Asia, putting significant pressure on supply.
A new vegetarian glucosamine source manufactured by Cargill, providing around 700 tons of the ingredient annually, will help ease pressure but pricing remains highly unstable.
Chinese producers have also cited high fuel costs as having a major role in the glucosamine price rises and the alternative to shrimp farming -fishing - is dependent on highly unpredictable harvests.