Seafood exports in April dropped by nearly 30%

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Seafood exporters lack capital to purchase production materials. Photo: T.H

According to the Vietnam Association of Seafood Exporters and Producers (VASEP), seafood exports in April 2023 recorded a constant decline by 28% over the same period in 2022, reaching only US 810 million.

Seafood enterprises are still under heavy pressure due to the slumping consumption market, export prices plummet along with production cost pressures on domestic production and processing, especially feed, seed and other basic costs. By the end of April 2023, seafood exports reached over $2.6 billion, 31% lower than the same period in 2022.

Ms. Le Hang, communications director of VASEP, said that the US market is getting deeper and deeper immersion in the food price escalation and consumption decrease. American families are too "tired" of the fact that food prices are so high. Now, Americans have considered cutting spending on low-value items by spending less on non-essential groceries but more on bulk and unbranded products instead, and focusing on high-end ones. Some people even buy and eat less in general.

American’s changing habits have caused Vietnam's seafood exports to the US to maintain a deep drop of 51% in April, making the US fall to the 3rd position in seafood import markets, after Japan and China. In the first four months of 2023, seafood exports to the US were estimated at US 418 million, down over 57% over the same period.

Exports to China, despite having a better signal, have not yet recorded a positive growth compared to the same period in 2022, which are mainly because pangasius exports to this market have not bounced back and the average export price has decreased. Moreover, the consumption demand of this market recovered more slowly than expected. By the end of April, Vietnam's seafood exports to China were estimated at $435 million, down 37%.

Opening up after Covid-19, China's real estate market remained quiet and industrial profits fell deeply, the economy faced constant headwinds which deflated the recovery capability. China's own domestic production is also struggling because customer spending is weaker than expected.

Due to the decline in both major export markets, pangasius exports were severely affected, resulting in sales of less than $ 600 million in the first 4 months of this year, down 46% compared to the same period in 2022.

Shrimp exports were also strongly affected by the decline in the largest consumer market, the US. By the end of April, shrimp export value reached over USD 891 million, down 44%

Among seafood exports, squid and some other marine fish species (except tuna) tended to be more positive in April. Accordingly, exports of other marine fish species increased by 9%, squid and octopus exports by 9%. Meanwhile, tuna exports still decreased by 36% and other seafood species were at a double-digit rate.

The two markets Korea and Japan both have lower import values of Vietnamese seafood compared to the same period last year, but the decline is less than that of the US and China. The decrease in shrimp exports to these markets is offset by revenue from processing and exporting seafood products to foreign seafood processors and traders.

Proposing solutions to overcome difficulties, Mr. Nam said, seafood processing and exporting enterprises mainly borrow USD. "Previously, the USD loan interest rate was below 3%, now it is over 4%. So, I recommend reducing the USD loan interest rate. In addition, the Government needs a credit package of about 10,000 billion VND with low interest rate to serve purchasing materials, and psychological stimulation for farmers and fishermen to maintain production. This is only a phased solution, but it is very necessary in the current period," said Mr. Nam.

According to Mr. Nguyen Hoai Nam, Deputy General Secretary of VASSEP, in the first 4 months of 2023, export orders of enterprises decreased sharply which were hurt by global inflation.

Businesses have been damaged because many orders are postponed or delayed causing a lot of inventory and slowing down cash flow. Along with that, limited credit capital makes businesses unable to afford to buy raw materials or at the right price for farmers and fishermen.

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Since the beginning of this year, Vietnamese businesses have actively participated in international seafood fairs in the US, EU and Japan as well as domestic trade programs, hoping to connect more and increase revenue in order to revive the seafood export. However, the seafood industry is looking for a pedestal to stand firm and bounce back as soon as the consumption reveals positive signals.