Seafood enterprises fishing for new orders

The expanding Covid-19 pandemic is severely affecting production and trade worldwide. Vietnam’s seafood exports in the first quarter of 2020 fell 14 percent compared to the same period last year. The majority of fishery businesses have seen a decrease of 35-50 percent in their orders and are facing shortages of new orders in the second and third quarters.

Seafood exports decreased sharply in the first quarter of 2020

Plummeting sales

The Vietnam Association of Seafood Exporters and Producers (VASEP) estimated that seafood exports in March dropped almost 20 percent compared to March 2019, reaching only US$549 million, with sales to major markets falling sharply. Specifically, exports to the EU dropped 40 percent, while those to China declined 25 percent, those to the Republic of Korea (RoK) decreased 24 percent, and those to Japan dropped 19 percent. In the first quarter, Vietnam exported seafood worth an estimated US$1.5 billion, with Tra fish exports deceasing 31 percent (mainly due to lower sales to China in January and February). Other seafood exports also fell sharply, and only shrimp exports experienced a slight decrease - 4.3 percent.

Most importers cancelling or delaying orders are from the EU, the RoK, and China, accounting for 20-40 percent of the total. Most shrimp orders were postponed or canceled, while pangasius sales were less affected, as their prices were lower and they were mainly sold to supermarkets. Vietnamese fishery enterprises have received a small number of new orders from China, albeit at far lower prices compared to the period before the pandemic, forcing Vietnamese enterprises to further lower their prices.

Solutions for employees and employers

On March 30, VASEP and the textile-apparel and leather and footwear associations proposed that the National Assembly Executive Committee, the prime minister, ministries and sectors help enterprises overcome difficulties and provide employees with an allowance equal to half of their monthly salary, using the unemployment social funds, with the remaining 50 percent to be paid by employers.

The associations also proposed that authorities allow interest-free loans for enterprises using the social and unemployment insurance funds. They suggested that the National Assembly approve reduction of the unemployment insurance payment rate for employees from 1 to 0.5 percent.

Regarding salary payment to employees, the associations proposed that the National Assembly and the government allow enterprises to choose one of the two following options: 1) Employees could accept a salary lower than the regional minimum wage agreed by the two parties (employee and employer); or 2) application of the 2019 Labor Code’s Article 99, according to which, in cases of work stoppage due to an epidemic, employees can receive a salary not lower than the regional minimum wage in the first 14 days and a salary agreed by the two parties from the 15th day.

The associations proposed that authorities extend the 2019 corporate tax payment deadline to the end of 2020, free businesses from paying value added tax (VAT) and trade union fees in 2020, lower the interest rates for loans signed prior to 2020, and decrease electricity, water, and seaport charges.