This record is a partial extract of the original cable. The full text of the original cable is not available.
040618Z Dec 03
UNCLAS LAGOS 002455
E.O. 12958: N/A TAGS: EFIS ETRD ECON NI SUBJECT: NIGERIAN SHRIMPERS: HOPEFUL (BUT UNLIKELY) PLAYERS IN U.S. MARKETS
1. (U) Summary: Nigeria's principal fisheries products, shrimp and prawns, are destined almost exclusively for export, but only a small percentage of Nigeria's total catch makes its way to U.S. markets. Exports are hindered primarily by high shipping costs and consumer preferences. Industry representatives say interest in expanding exports to U.S. markets is high, but unless conditions change, significant increases are unlikely. End summary.
2. (U) Of all commercial fisheries in Nigeria, shrimp fisheries are by far the most lucrative. With nearly three-quarters of the country's 250 vessels dedicated to shrimp trawling, Nigeria's fisheries produce shrimp and little else. Trawlers with twelve- or thirteen- person crews spend as many as 50 consecutive days in the Niger Delta region, often many miles offshore, and return with hundreds of metric tons of processed and frozen shrimp. Approximately ninety percent of the catch is exported, most of it to Europe, China and Japan. Very little of it makes its way to U.S. markets.
3. (U) Sam Azebeokhai and Robinson Omomia, President and Executive Secretary of the Nigerian Trawler Owners Association (NITOA), respectively, say several of the association's 45 member companies are looking for ways to expand exports to the United States. Many purchase trawling vessels from U.S. manufacturers, and more than a few are interested in strengthening relationships with their U.S. counterparts.
4. (U) The interest is there, but Nigerian shrimp producers find it difficult to export to U.S. markets, mostly because transportation is prohibitively expensive. It is also scarce. Since few if any ships sail directly between the U.S. and Nigeria, most exporters find it easier and more economical to send their catch elsewhere. In just a few months, they will find it even easier to do so: NITOA expects to open a large-scale fisheries laboratory in Lagos in mid- January. The facility was built with EU technical assistance and will streamline the certification of shrimp products' compliance with international standards. Azebeokhai and Omomia believe the laboratory will make European markets even more attractive to Nigerian shrimp producers.
5. (U) Exports to U.S. markets are further hindered by consumer preferences for peeled shrimp with no heads. According to Manjit Sadarangani, Managing Director of Atlantic Shrimpers Limited, Nigeria's largest shrimp exporter, the preference leads to significant weight loss: up to 35 percent in some cases. Nigerian shrimp exporters may be able to sell their products at a ten percent premium in U.S. markets, but they lose so much weight meeting consumers' demands that they can make more money in Europe selling heavier products at slightly lower prices.
6. (U) Comment: Nigerian shrimp producers looked briefly to AGOA to provide a cost-effective means of entering U.S. markets, but shrimp and prawns are excluded from AGOA trade preferences. They are likewise excluded from GSP concessions, although they are free of duty, with the exception of shrimp and prawns containing meat products (these are subject to five percent ad valorem tariffs). In the absence of duties, shipping costs and consumer preferences appear to be the biggest obstacles facing Nigerian shrimp exporters. A further obstacle may be Nigeria's inadequate use of turtle excluder devices. Shrimp producers are reluctant to use them, even though their non-compliance could lead to the exclusion of their products from U.S. markets. At the moment, the absence of a large market leaves little incentive for compliance. Unfortunately, unless Nigerian shrimp exporters partner with U.S. firms or overcome these barriers, significant inroads in U.S. markets are unlikely. End comment.