Japan overtakes the US, becoming the number one seafood import market of Vietnam

Leading markets of Vietnamese seafood imports

Processing seafood for export at Fimex Vietnam Company. Photo: TL

According to the Vietnam Association of Seafood Exporters and Producers (VASEP), the US economy is unstable, gasoline and electricity prices have dropped, but food prices are still high. The American people, especially the low-income class, had to change their diets and food purchase channels. There has been a trend formany consumers to consider choosing chicken, beef or pork instead of seafood. Grocery stores with discount programs often have better sales than supermarket channels. More and more people are choosing to buy home-cooked food to save money.

The movement of the largest market has strongly affected the results of Vietnam's seafood export and the business situation of many enterprises. With US $ 283 million, down 51% in the first quarter of 2023, the US is no longer the number one Vietnameseseafood market.

However, Japan surpassed the US to become the largest import market of Vietnamese seafood, although exports to this market decreased by 7%, reaching over US$322 million in the first quarter of 2023.

The structure of seafood exports to Japan is leaning more towards seafood products such as squid, scad, pollock, tuna, and grouper.

Japan is Vietnam's largest seafood consumption market today, mainly in the marine fish segment, in which a significant part of raw fish imported from Japan to Vietnam is processed and exported back to this country. Therefore, seafood exports to Japan increased by 10%. At the same time,the export of seafood products to other major markets such as the US, Korea, China, and the EU decreased by 6% - 45%.

China's market-opening is the expectation of seafood enterprises, hoping to offset the decline of other major markets. In the first two months of this year, China's seafood imports from other countries increased by 32%, reaching over 560 thousand tons, with a value of over $2.7 billion, up 20%. Thus, consumption demand is increasing, but the decrease in import prices into this market has affected sales inVietnam. Particularly for pangasius, in the first two months of this year, China imported 18.4 thousand tons with an average price of 2.15 USD/kg, down 7% over the same period in 2022.

Therefore, by the end of the first quarter of this year, Vietnam's seafood exports to this market were 27% lower than in the same period last year.

The EU market decreased by 29% in the value of Vietnam's seafood imports in the first quarter, reaching only US $ 210 million. Exports of shrimp and seafood products to the EU decreased by 7-50%, especially pangasius exports were more stable, thanks to increased exports to the German market.

Exports to the top five largest markets in the EU, including Germany, the Netherlands, Belgium, Italy and Spain, all decreased by 4-44% over the same period. However, many small markets, especially countries in Eastern Europe, still increase imports of Vietnamese seafood, especially pangasius products. Specifically, seafood exports to Poland increased by 49%, to Lithuania by 29%, to Finland nearly quadrupled, and to Romania by 17%.

In the first quarter of this year, most shrimp and pangasius exporters experienced a sharp decline in export value due to market difficulties and the pressure of high input costs of the shrimp and pangasius industry: feed prices, breedersledto high raw material prices. In particular, businesses whose traditional and main market is the US are most affected.

Not only that, many seafood processing and exporting enterprises also face difficulties because of the lack of domestic raw materials and more difficulties in entering the EU market, so many businesses have a decrease in sales. However, some businesses have higher revenue than last year's period thanks to the promotion of processing and processing of exploited seafood products, especially marine fish.

Regarding the export market, export turnover to most of Vietnam's major trading partners in the first quarter decreased. Assessing the causes of the decline in exports of many commodities, the Ministry of Industry and Trade pointed out a few basic factors. Accordingly, the price of input fuel and global energy remains high, affecting domestic enterprises' production costs.

Another factor is that inflation is high, and monetary policy has not been loosened; The slow recovery of the world economy and the collapse of some banks in the world have had certain impacts on the trend of tightening spending on purchasing common and luxury products in some big markets such as the US, EU, reducing import demand. In addition, the reopening of China also creates competitive pressure on Vietnam's exports of the same type.

Along with external factors, domestic enterprises are currently facing difficulties in accessing capital;bank interest rates and input costs are high. In particular, enterprises in the processing industry are facing a serious shortage of orders, and their ability to absorb capital has begun to decrease.

According to VASEP's forecast, the picture of seafood exports may gradually brighten in the second quarter and is expected to recover better from the third quarter when the Chinese market has a clearer improvement and seafood enterprises have a better recovery adjust product and market structure following the context of 2023.