Vietnams pangasius conquered many major Chinese cities

Through online channels such as China's leading e-commerce platform Alibaba, Vietnam’s pangasius products have been exported  to many major Chinese cities.

Pangasius is processed for export

Export to big cities

According to Truong Dinh Hoe, General Secretary of Vietnam Association of Seafood Exporters and Producers (VASEP), Vietnam previously exported whole pangasius to some provinces on the southern border of China, but now pangasius fillet products have been exported to major cities such as Beijing, Shanghai and Dalian. The Chinese demand for this product is predicted rise.

The increasing popularity of Vietnamese pangasius fillets in China comes at a most opportune time. Vietnamese pangasius exporters are subject to a higher anti-dumping tax rate than the rate announced by the US Department of Commerce (DOC).

The judgment caused difficulties for Vietnamese pangasius exporters who did not know the tax rate the US would impose on exported Chinese tilapia products.

Currently, Vietnam’s pangasius exporters are benefiting from the US - China trade war, because major exporters shifted to import Vietnamese pangasius products and this product is preferred by the US consumers.

In the past 10 years, China has emerged as a market specialising in importing fishery products instead of exporting as before. According to VASEP, the Chinese market has a great opportunity but still has many potential risks because China is tightening inspections on food safety and cross-border trade.

China’s demand for fishery products has increased steadily with more than 3 million tonnes per year. Chinese consumers prefer foreign products and natural exploitation due to food safety concerns. Notably, they are willing to buy products that are accepted by the US and European markets. Typically, Vietnamese pangasius products have seen increased consumption in China since being accepted by the US.

Leading in exporting pangasius

Vietnam is the largest pangasius exporter in the world, with a production of 1.25 million tonnes in 2017 and 1.33 million tonnes in 2018. India is the second largest exporter with a production of 540,000 tonnes in 2018, followed by Bangladesh with 455,000 tonens and Indonesia with 110,000 tonnes.

“Vietnamese pangasius is facing difficulties in conquering the US market. However, the export to this market also helps businesses create trust and build relationships. The certification is not required in the Chinese market and trade is implemented via email and rarely conducted directly” Ich said.

According to Rabobank, China is rapidly catching up with the EU as the world's largest fishery importer, importing nearly 5 million tonnes in 2018.

"Pangasius is a really good choice for Chinese customers who are looking for white fillet fish products,”Hoe said.

One of the challenges is to create trust for Chinese customers to buy pangasius fillets instead of whole pangasius. According to the World Bank, GDP China's increased from USD 3,471 in 2008 to USD 8,827 in 2017. Meanwhile, Vietnam's GDP increased from USD 1,143 to USD 2,342. This shows that Vietnam's labour costs are much cheaper than China’s.

This means pangasius exporters in the Mekong Delta are selling this products with a more competitive price to the Chinese market.

Currently, exports to China are increasingly convenient with low cost. Most fishery exporters in the south transport their goods by seaway instead of by roadway. The export by seaway helps exporters limit risks on payment, product quality and save costs rather than by across border trade by roadway.

In 2019, there will be an opportunity for enterprises to expand exports by seaway to major China’s cities to improve the quality and quantity of exports. Fishery exports to the Chinese market are forecast to reach USD 1.5 billion, of which pangasius is one of the major products.