Seafoood industry hit with millions of ringgit worth of charges

The current selling price of shrimp is about RM40 per kg.

GEORGE TOWN - The seafood industry is likely to be hit with millions of ringgit of export and import charges annually when a new ruling comes into effect today, eroding the competitive edge of the local seafood industry.

Malaysian Frozen Foods Processors' Association (MFFPA) secretary Saw Hai Earn told StarBiz that the Malaysian Quarantine & Inspection Services (Maqis) was imposing exportation and importation inspection charges of RM2.50 for not more than 50kg of seafood, RM5 per container of less than 100kg of seafood and RM0.05 per kg of seafood for exports of more than 100kg of fish.

"On average, Malaysian frozen seafood producers export more than 150,000 tonnes of seafood products annually.

"The export inspection charges would come to over RM7.5mil (S$ 3 million)annually, which is difficult to pass on to customers if we want to stay competitive.

"The importation inspection charges should also be waived, as there are many seafood exporters who import raw seafood materials to value add to their processed products that would be re-exported," Saw added.

These charges are very untimely, as they would impede export and reduce the much-needed foreign reserves that the country needed, noted Saw.

"They would add more burden to the industry, which is still suffering losses in business and struggling to compete in the global seafood industry.

"Thus, we want to request that Maqis, formed in 2010 under the Agriculture and Agro-Based Industry Ministry, does not implement the charges for Malaysian seafood producers," he said.

Saw added that the local seafood industry was still in a very tough predicament.

"As it is, the current tonnage exported to Europe is about 3,000 tonnes annually, down from 40,000 tonnes annually in 2006, due to the stringent European Union (EU) certification required for Malaysian fishing vessels, shrimp farms and seafood production facilities introduced in 2009.

"It is very difficult for us to pass the charges on to our customers if we want to remain competitive," he said.

Saw said the EU ban on Malaysian seafood from June 2008 to May 2009 for a period of 12 months had resulted in a huge loss of business for Malaysian seafood processors.

"We were required to incur huge expenses and investments that ran into hundreds of millions of ringgit to upgrade our equipment, processing plants, cold rooms and other facilities to comply with the very strict EU requirements," he said.

Saw added that the Malaysian seafood industry would be facing another challenge soon, as the EU was withdrawing its Generalised System of Preferences for Malaysian seafood exporters in January 2014.

This would see high duties being imposed on Malaysian seafood entering the EU next year, he said.

Meanwhile, the Malaysia Shrimp Industry Association president Syed Omar Syed Jaafar said Malaysian shrimp producers would have to raise selling prices of shrimps to pass the cost to the overseas customers, eroding Malaysia's competitive edge in the international market.

The current selling price of shrimp is about RM40 per kg.

Syed said the target for shrimp export in 2013 was around 75,000 tonnes, compared to about 70,000 tonnes in 2012.