Vietnam seeks to diversify its seafood markets as exports to US decline

The United States remains one of the largest importers of Vietnamese shrimp and catfish but revenues from this market have been falling in recent months, forcing Vietnamese exporters to seek new markets.

According to the VASEP, an association of seafood producers and exporters, Vietnam’s catfish exports to the US reached US$18.44 million in August, down 58.5% from the previous month and down 54.8% compared with the same month of 2016. Total catfish export revenues to the world’s largest economy in the seven months through to July only rose by 3.3% over the same period of last year to US$220.8 million.

Shrimp exports to the US declined 5.5% during the period, while exports to Japan, the European Union and China surged by 35.2%, 20.5% and 106.3% respectively, throwing the US into fourth position among the largest export markets of Vietnamese shrimps.

Such a decrease was attributed to the US imposition of trade protection measures on Vietnamese seafood, which levied the highest anti-dumping taxes among Vietnam, India and Thailand. Meanwhile, the price of raw shrimp in the domestic markets has also been rising steadily and remains high, thereby increasing input costs and weakening the competitiveness of Vietnamese shrimp products in comparison with those of Indonesia, India and Thailand.

Furthermore, the sharp decline of catfish exports to the US in August was attributed to a decision by the US Food Safety and Inspection Service to inspect all shipments of Vietnamese catfish as of August 2.

According to the VASEP Secretary-General Truong Dinh Hoa the 5.5% decline in shrimp exports to the US is not too large but is a warning for Vietnamese seafood enterprises as for years the US has been the largest importer of this food. Therefore in the long run, it is necessary to seek solutions to both deal with the technical barriers from the US and to introduce Vietnamese shrimp to other markets.

Currently Japan’s demand for Vietnamese shrimp is rising and the world’s third largest economy is expected to become a steady market for a long time. In addition, China has recently emerged as a new destination for Vietnamese shrimp but, according to many exporters, the market is not quite stable. Besides these aforementioned markets, the Republic of Korea, Australia and Brazil are new potential markets for Vietnamese enterprises’ export market diversification strategies.

In addition to shrimp, Vietnamese catfish processors and exporters should make efforts to raise their product quality. These enterprises have stated that they will be more careful in selecting raw catfish for processing when exporting to the US, while striving to penetrate other markets and focusing on the domestic market which has been neglected for years.