POTENTIAL AGOA SUCCESS FOR MOZAMBIQUE: 1200 TONS

UNCLAS SECTION 01 OF 02 MAPUTO 000603

SIPDIS
STATE FOR AF/S - HTREGER, OES - JSTORY, EB
MCC FOR SGAULL
COMMERCE FOR INTERNATIONAL TRADE SPECIALIST RTELCHIN
PRETORIA FOR AG ATTACHE - SREYNOLDS AND RBICKFORD
GABORONE PLEASE PASS TO SOUTHERN AFRICA GLOBAL
COMPETITIVENESS HUB FOR AHILLIGAS
E.O. 12958: N/A
TAGS: ETRD EINV EFIS MZ AGOA
SUBJECT: POTENTIAL AGOA SUCCESS FOR MOZAMBIQUE: 1200 TONS
OF MOZAMBICAN SHRIMP TO BE SOLD IN THE U.S. MARKET IN 2005

REF: MAPUTO 537


1. SUMMARY. Indian Ocean Aquaculture (IOA),a
multinational-owned and managed shrimp aquaculture firm in
Mozambique, estimates that it will export up to 1200 tons of
frozen shrimp to the U.S. in 2005. U.S. buyers of Mozambican
shrimp include retail chains Tasty Choice and Wal-Mart. With
U.S. seafood companies in search of new seafood suppliers in
today's post-tsunami world, Mozambique is well-positioned to
increase its export of high-quality shrimp in the near to
mid-term. END SUMMARY.

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BACKGROUND: THE RISE OF SHRIMP AQUACULTURE
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2. Mozambique's second largest export (in dollar terms)
behind aluminum is seafood, including fresh or frozen shrimp
and lobster. A majority of seafood export is sent to EU
countries, particularly Spain. Other markets include India,
East Asia, and increasingly the U.S. Trawler fleets,
artisanal fishermen, and more recently shrimp aquaculture
pioneers supply domestic and international customers.
Although trawler fishermen cannot yet supply the U.S. market
because they have not been certified for their use of turtle
exclusion devices (TED),artisanal sellers have been selling
small quantities of frozen shrimp and lobster to buyers in
the U.S. since 2002. (NOTE: The National Marine Fisheries
Service plans to visit Mozambique in late 2005 to assess
whether trawlers should be granted TED certification. END
NOTE).


3. Recently, foreign investors have been investing heavily in
shrimp aquaculture. Thanks to its long coastline (1600
miles) and suitable tropical climate, Mozambique has
tremendous shrimp farming potential. Three shrimp
aquaculture enterprises are now in operation - one
(Chinese-owned) in the central port city Beira, a second
(French-owned) further up the coast in Quelimane, and a third
(largely German-owned) in the northern town of Pemba. The
Pemba shrimp operation, Indian Ocean Aquaculture (IOA),
consists of a shrimp hatchery, an expanse of prawn farms, and
a refurbished textile factory converted into a processing
plant. IOA began exporting frozen aquaculture shrimp to
India, France, Japan and the U.S. in 2004. According to
Marcos Moya, Managing Director of IOA, the company shipped
120 tons of shrimp to the U.S. last year. In 2005, he
predicts, IOA will export ten times this amount, some 1,200
tons of shrimp, to the United States. IOA sells directly to
Tasty Choice in New York and to a buyer in Texas, who then
distributes to five Wal-Mart locations around the U.S.


4. Overall, Moya estimates IOA will supply nearly 6,000 tons
of shrimp to the international market in 2005. Depending on
their size, shrimp fetch anywhere from USD 2 to USD 4 per
pound. Moya indicated that production is "good" and
"growing" in Mozambique.

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INDIAN OCEAN AQUACULTURE (IOA)
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5. IOA management consists of a multinational mix of
investors, researchers, biologists, and aquaculture experts
from Germany, the Philippines, the U.K., the U.S., Chile,
Fiji, and several other countries. Seventy percent of IOA is
German-owned. Two American investors are IOA board members.
One of the Americans, IOA's marketing director, frequently
visits Mozambique from his home in Gainesville, Florida. IOA
has approximately 500 Mozambican employees, making it the
largest employer in Pemba.

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AN AGOA SUCCESS STORY?
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6. Comment: Mozambique has so far not taken advantage of
AGOA, unlike some other countries in the region. Since
AGOA's start in 2000, Mozambique has exported only a limited
volume of garments (USD 2.2 million in 2004, for example),
seafood, tobacco, cashew nuts, and other products. In 2004
all Mozambican exports to the U.S. amounted to only USD 10.8
million. If IOA's expectations are borne out, however,
Mozambique's AGOA exports should increase dramatically --
perhaps by five or six million dollars. Coincidentally, now
is a great time for Mozambican shrimp to enter the world
market. In today's post-tsunami world, U.S. seafood
companies and their competition elsewhere are having
difficulty meeting demand with product from traditional
exporters in Southeast Asia, and so are eager to import
shrimp from a new source such as Mozambique.
LA LIME