EVFTA hurrying tuna exports

Vietnam's tuna export outlook for this year seems to be hopeful as it is seeing a reversal of sudden growth in exports to markets such as the EU, Israel and Canada.

Advantages from the EVFTA

According to the Vietnam Association of Seafood Exporters and Producers (VASEP), by the end of July, Vietnam's tuna exports still decreased by nearly 17% over the same period in 2019, reaching nearly $US357 million.

During the past seven months, the Covid-19 pandemic has significantly affected Vietnam's tuna exports to markets. However, Vietnam's tuna export outlook for this year seems hopeful when seeing a sudden growth reversal in exports to markets such as the EU, Israel and Canada.

However, for the EU market, after a long period of decline in imports, Vietnam's tuna exports to the EU increased by nearly 65% in July. This growth has helped increase the proportion of the EU market in Vietnam's total tuna exports in the first seven months of 2020 to over 20%.

Notably, Vietnam's tuna exports to the three main markets in the EU including Germany, Italy and the Netherlands saw a high three-digit growth in July, 119%, 200% and 210%, respectively.

This growth was due to the impact of the EU-Vietnam Free Trade Agreement (EVFTA) that took effect on August 1, which caused EU importers to increase imports from Vietnam.

According to enterprises, normally, shipments from Vietnam to the EU take at least three weeks. Therefore, in July, Vietnam's tuna shipments are being exported early to the exporting country for shipping to bonded warehouses which waiting for "golden time" for customs clearance and enjoy preferential tax rates.

Compared to the same period last year, exports of tuna products from Vietnam to the EU increased in July. In particular,  fresh, raw and frozen tuna increased the most, increasing 2,607% compared to July last year, this is the group of products being eliminated tariffs under the commitments of  EVFTA right after the agreement takes effect.

Good signals from the US market

Along with the EU, Vietnamese tuna exports to other major markets such as Israel and Canada also show signs of recovery. Tuna export value to these two markets increased by 26% July 2020 and 146% respectively over the same period in 2019.

According to some enterprises, the Covid-19 pandemic is reducing the supply of tuna from countries such as Ecuador, the US and Italy, which creates opportunities for Vietnam to boost exports to these markets.

Contrary to the trend of exportsto the EU, tuna exports to the US market remained low. Although Vietnam's exports of processed and canned tuna with HS16 codes to this market continued to increase, the growth rate is not high enough to compensate for the decline in fresh and frozen tuna exports.

Therefore, for the first seven months of the year, tuna exports to the US were still down nearly 19%. Currently, after the early outbreak of Covid-19 pandemic, the stockpiling demand of American consumers increased, the purchasing power of preserved tuna products has stabilised. Therefore, it is expected that the US’s imports of canned tuna will maintain growth at the current level; growth fluctuates around 11%.

In the short term, due to the complicated situation of Covid-19 in Vietnam and abroad, the market situation will not be stable, especially in markets such as ASEAN, or Japan, it is expected that exports of preserved tuna products such as canned tuna and packaged tuna will continue to increase.