Pangasius businesses seek to export to niche markets

Huge space for Vietnamese pangasius businesses to enter the densely populated market segment

Processing pangasius for export at Nam Viet Company. Photo: provided by enterprise

The decrease in exports narrowed by more than half

According to analysis of the Vietnam Association of Seafood Exporters and Producers (VASEP), pangasius export turnover in August 2023 reached 170 million USD, down 13% compared to the same period in 2022. A decrease of 13% in the month August has shrunk by more than half compared to previous months (May, June, and July recorded a decrease of 23-36%).

Vietnam's main pangasius export product is pangasius under code 0304 (except fish cakes and surimi products) reaching 973 million USD, accounting for 82% of the proportion. Followed by live, fresh, frozen, dried pangasius products (under code 03) reached 192 million USD, accounting for 16% of the proportion and other processed pangasius (under code 16) reached 20 million USD, accounting for 2 % proportion.

Regarding consumption markets, in August 2023, pangasius exports to main markets such as China & Hong Kong, US, EU, and CPTPP continued to decrease by double digits. In August, exports to a number of smaller markets recorded positive double-digit growth compared to the same period last year, such as Saudi Arabia increased by 79%, Brazil increased by 53%, Colombia increased by 14%, and Egypt increased by 14%.

The Chinese and Hong Kong markets are the markets that consume the most Vietnamese pangasius, continuously leading the top markets importing the most Vietnamese pangasius from 2019 to present. Recorded in the first 8 months of this year, Vietnam bought 378 million USD of pangasius, down 30% compared to the same period last year. By the end of August 2023, the Chinese market alone imported 354 million USD, down 31% over the same period in 2022.

By the end of August 2023, the US still maintained the No. 2 position in importing Vietnamese pangasius after China and Hong Kong. In the first 8 months of 2023, Vietnamese pangasius exports to the US reached a turnover of 184 million USD, down 56% compared to the same period last year. In August 2023 alone, this market bought 25 million USD of Vietnamese pangasius, down 24% compared to the same period last year. Inventories in the US tend to decrease, combined with the US President's visit to Vietnam in early September, which is expected to be a good sign for pangasius exports to the US.

The CPTPP market continues to remain the third largest market block in importing pangasius after China, Hong Kong and the US. By the end of August 2023, Vietnam's pangasius export turnover to CPTPP reached 158 million USD, down 34% over the same period last year.

Ong Hang Van, Deputy General Director of Truong Giang Seafood Joint Stock Company, said that in the first half of 2023, pangasius businesses will suffer many impacts, with many difficulties greatly affecting export turnover. Vietnam's key pangasius export markets all declined sharply, especially the US and China markets; the inventory of pangasius enterprises is very large, and there is still a lot of fish in the pond.

Small market prevails

Notably, in the context of a general decline, most markets in the CPTPP bloc also reduced imports of Vietnamese pangasius from 1-47%. However, some small markets in the bloc still recorded positive double-digit growth such as Brunei increased by 12%, New Zealand increased by 16%.

Similarly, in the EU market, in the first 8 months of this year, 115 million USD of pangasius was imported from Vietnam, down 22% over the same period last year. Pangasius exports to the EU in May - July recorded a decrease of 13% - 22%. Most markets in the EU reduced imports of Vietnamese pangasius by 14-65%. Some bright spots still recording positive double-digit growth in this market sector are: Sweden increased by 28%, Germany increased by 19%, Denmark increased by 18%. Some markets recorded positive growth of 3-4 digits such as Estonia increased by 138%, Finland increased more than 11 times.

According to businesses, thanks to diversifying export markets, their pangasius export orders have recovered. In June and July 2023, the amount of seafood products, including exported pangasius, of Truong Giang Seafood Joint Stock Company increased again. This is a signal that the market will recover in the remaining months of this year and 2024.

Similarly, major export markets of VinhHoan Seafood Joint Stock Company also recorded positive growth again. Of which, exports to the European Union (EU) market reached 153 billion VND in July 2023, an increase of 22% over the same period last year. Similarly, export revenue to China increased by 13% and export revenue to remaining markets increased by 20% compared to July 2022.

According to Ong Hang Van, currently the company has 3 processing factories with a capacity of 300 raw materials/day. But the industry's biggest weakness is that food depends too much on imported ingredients. The current problem requires all possible support to bring down the price of aquatic food. The Ministry of Finance should consider bringing the import price of animal feed ingredients to 0%, instead of 2% as currently.