Shrimp exports expected to enjoy fruitful advantages throughout 2020

Domestic shrimp firms are expected to enjoy a wealth of opportunities that will ease the export of their products to the EU, the United States, and Japan thanks to the EU-Vietnam Free Trade Agreement (EVFTA), the ongoing US-China trade war, and the upcoming 2020 Tokyo Olympics.

Last year saw Vietnam’s shrimp exports drop by 5.4 per cent to US$3.36 billion in comparison with the previous year, according to the Vietnam Association of Seafood Exporters and Producers.

Despite this slight decrease, current figures indicate positive signs for the country’s shrimp exports to major importers over the course of the coming year.

Last year, the export of white leg shrimp suffered a fall of 3.4 per cent to US$2.4 billion, accounting for 70.1 per cent of the total shrimp export value.

In addition, tiger shrimp plummeted by 15.9 per cent to over US$687 million, accounting for 20.4 per cent, while other types of shrimp reached US$ 317.6 million, making up approximately 9.4 per cent of the total shrimp export value.

Prices of raw shrimp experienced falls during the first half of 2019 in spite of the nation’s shrimp output increasing. This can be attributed to shrimp inventories in several markets remaining high while the supply source of shrimp from other countries also surged, causing the price of imported shrimp in markets to be lower than the previous year.

Elsewhere, China has made moves to tighten its control over quality, the traceability of the origin of products passing through border areas, and dealing with the unpredictable developments of the US-China trade war, all of which have caused a decrease in shrimp exports.

In the face of these factors, shrimp exports were able to recover in the second half of 2019 as a result of the increase in raw shrimp prices.

The EU remains the nation’s largest shrimp importer, accounting for 20.5 per cent of the country’s total shrimp export value with 2019 seeing the export of Vietnamese shrimp to the EU reach US$689.8 million, down 17.7 per cent compared to 2018.

Following 2019, the export of Vietnamese shrimp to the EU is expected to gain momentum as soon as the EVFTA comes into force this year.

The US is ranked second in terms of importing shrimp from the Southeast Asian nation, making 19.4 per cent of the country’s total shrimp export value. Indeed, 2019 saw shrimp exports to the US market reach US$653.9 million, up 2.5 per cent in comparison to 2018.

The increased level of US demand for shrimp imports from Vietnam in late 2019 indicates a positive sign as the US is in the midst of reducing imports from India, Thailand, and especially from China.

In August 2019, the US Department of Commerce released the final results of the 13th period of review, officially imposing zero per cent tariffs on a total of 31 Vietnamese shrimp exporters. This move has given fresh impetus to domestic shrimp enterprises who are seeking to export to the US in the near future.

The escalating trade tensions between the US and China has led the US to increase tariffs to 25 per cent on US$250 billion worth of Chinese imports, including shrimp products. This has, therefore, created opportunities for rivals, including those from Vietnam, to penetrate the US market.

Furthermore, 2019 also saw the nation’s shrimp exports to Japan decrease by 3.3 per cent to over US$618.6 million in comparison with 2018. Despite this the 2020 Tokyo Olympics are projected to increase seafood consumption in the Far East country, with shrimp products in particular set to boom, presenting an array of opportunities to shrimp exporters globally.

This year, shrimp exports are forecast to recover as a result of a number of favourable factors. The anti-dumping tax imposed on the US market has been slashed to zero per cent, while the EVFTA is expected to come into force in June 2020 which will ultimately serve to increase shrimp exports to the EU market on the back of advantageous taxes.

With regard to the Chinese market, between 75 per cent and 80 per cent of the country’s seafood products are exported via official channels, which will play an important role for shrimp exports to rebound in the Chinese market in the near future.