How will seafood companies fare this year?

Analysts believe that Vietnam’s seafood industry will face difficulties until the end of June.

In the last two years, Japan, the US, South Korea and China have been the four major export markets for Vietnam. In January 2020, the four markets made up 54.9 percent of Vietnam’s total seafood export value.

The turnover of seafood exports to Japan accounted for 18.02 percent of total export turnover, down by 28.16 percent compared with the same period last year. The figures were 17.6 percent and 26.3 percent, respectively, for the US, 10.27 percent and 31.53 percent for South Korea, and 8.94 percent and 43.48 percent for China.

According to VASEP’s (Vietnam Association of Seafood Exporters and Producers) secretary general Truong Dinh Hoe, the seafood industry, like other business fields, has been seriously affected by Covid-19, and the impact will last until at least June 2020.

A VASEP survey found that only 30-50 percent of orders are still delivered as initially negotiated. Meanwhile, importers have asked to delay 20-40 percent of deliveries and 20-30 percent of orders have been canceled.

This is because many governments have closed their border gates because of Covid-19. Since importers cannot sell products, they don’t want to import more.

Also according to VASEP, the markets which have the highest proportions of clients canceling orders or postponing deliveries are the EU, South Korea and China.

As for the EU market, most shrimp orders have been canceled or postponed. Meanwhile, the orders for catfish bear less impacts because of lower selling prices.

A representative of Vinh Hoan JSC said the company’s catfish consignments are still shipped to the US and EU by sea. The Ministry of Industry and Trade (MOIT) reported that the export turnover to the EU market decreased by 4.56 percent in the first two months of the year to $5.15 billion.

Any more opportunities for Vietnam’s seafood?

Analysts believe that Vietnam’s seafood industry still have opportunities to boost exports, especially when the epidemic begins declining in some markets. Orders restarted from China in March.

Some catfish exporters predict that 50 percent of exports to China may recover in April and the figure may rise to 100 percent by June.

The FTAs between Vietnam and other countries are also a great advantage. The EU market is expected to recover well especially when EVFTA takes effect. Under the agreement, Vietnam’s catfish products to the market will be taxed zero percent.

In the US, consumption is believed to be higher this year than 2019 because inventories are running out. Meanwhile, the white-meat fish processing factories in China have had to close because of the epidemic, leading to a decrease in Chinese Pollock exports to the US. This will provide great advantages to Vietnam’s catfish.