Shrimp exports plunge, the goal of 4.2 billion USD becomes a challenge

Shrimp exports in the first months of 2019 were not very positive, making the shrimp export target of USD 4.2 billion in 2019 more difficult and challenging.

Japan is Vietnam's second largest shrimp export market. Photo: N.Thanh

Reduced in every major market

According to the Association of Seafood Exporters and Producers (VASEP), following the slump of 2018, in the first 2 months of 2019, shrimp exports reached 373.6 million USD, down by 15.2% over the same period in 2018. The White leg shrimp still occupied the top position of Vietnam export shrimp products with 65.8%; the Black tiger shrimp accounted for 24.3% and the marine shrimp accounted for 9.9%.

During this period, Vietnam shrimp exports to the 5 main markets (EU, Japan, China, Korea, and US) all fell. In particular, the export value to EU decreased the most by 27.6%.

"Consumption of Vietnamese shrimp from the EU started to decline from the second half of 2018. In the first 2 months of 2019, shrimp exports to Germany and the Netherlands fell sharply by 16.6% and 47.5% respectively", VASEP clarified.

For the remaining markets, China, the US, Korea and Japan shrimp exports fell by 1.6%, 19.2%, 18% and 0.9%, respectively.

The reason of the decline in shrimp exports is that it coincided with Tet holiday and inventory in markets still remained. Thanks to the favorable weather, many shrimp farming nations planned to expand shrimp farming such as India, Ecuador and Indonesia. This has led to a high supply trend and prevented a price increase in the first months of 2019. Particularly in the US market, the pressure from the Seafood Import Monitoring Program (SIMP), the low price of shrimp imported from India and the anti-dumping tax on the US market have all caused pressure for businesses, reducing the competitiveness of Vietnamese shrimp.

In 2019, the fisheries sector set a target total export value of 10 billion USD. In particular, the shrimp exports to reach 4.2 billion USD. In the face of market movements in the early months of this year, Minister of Agriculture and Rural Development Nguyen Xuan Cuong stated that 4.2 billion USD was a 10% increase compared to 2018. This was a high target and a big challenge for Vietnamese shrimp in 2019.

The decline is temporary only

Although the beginning was not very smooth, the export "picture" has also seen positive signals. The case of exporting shrimp to the Japanese market is an example. VASEP analyzed that Japan is the second largest shrimp export market of Vietnam, accounting for 18% of the total shrimp export value. In 2018, Vietnamese shrimp exports to Japan tended to decrease. Since the beginning of this year, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership has come into force (since January 14). In February 2019 alone, among the 7 major shrimp export markets, Japan was the only one that increased the importation of shrimp from Vietnam with a growth rate of 14.7%. 2019 also marked the completion of the roadmap for tax reduction in the Vietnam-Japan Economic Partnership Agreement (VJEPA). This is a good time for enterprises to boost their exports to Japan when the import tax on all seafood products from Vietnam to Japan is 0%.

"It is forecast that shrimp exports in the coming months will increase and the decrease in the first 2 months of this year is temporary. With the advantages of the free trade agreements, enterprises need to focus on promoting their value-added production and need more regulation in the whole shrimp production chain", VASEP recommended.

Mr. Truong Dinh Hoe-General Secretary of VASEP stated: In order for the export shrimp market to reach 4.2 billion USD, it is necessary to focus on improving the competitiveness of Vietnamese shrimp and to solve quality problems according to the international certification. For the US market, it is necessary to solve the competitiveness of Vietnamese shrimp compared to other countries supplying them. Recently, India has become very competitive in price compared to Vietnamese shrimp, so we needed to find a difference, thereby creating new competitiveness.

According to Minister Nguyen Xuan Cuong: The shrimp industry needs to focus on forming a closed production chain, promote propaganda, encourage farmers to participate in cooperatives, connect with businesses, comply with farming techniques including breeds, food, and environmental treatment. In addition, it is necessary to focus on state management from central to local levels to control, inspect, check and ensure clean production. The system requires more than 2,000 processing facilities, including more than 200 modern processing factories to offer high quality products to provide the market with the highest value.

According to some experts, the export market also needs more attention. Besides efforts to expand the scale of traditional markets such as EU, US, Japan and China, it is necessary to expand shrimp export to other markets, typically the Middle East and African markets.