Seize the opportunity to export shrimp to the EU

Sao Ta Joint Stock Company harvests shrimp to prepare for export at the end of the year. Photo: FMC

According to information from the Vietnam Association of Seafood Exporters and Producers (VASEP), since the beginning of 2021, Vietnam's shrimp exports to the EU only decreased in August and September because processing factories had to reduce operating capacity to prevent the Covid-19 pandemic, while the remaining months all grew positively.

As of October 15, 2021, Vietnam's shrimp exports to the EU reached nearly US$439 million, up 10.3% over the same period last year.

According to Ms. Kim Thu, shrimp market expert of VASEP, the EU is the second-largest shrimp import market of Vietnam, accounting for 15%. Since the beginning of the year, Vietnam's shrimp exports to the EU market have recorded a good growth rate. The EU's shrimp import demand in the last months of this year continues to increase.

The two main import markets for Vietnamese shrimp in the EU, Germany and Belgium, have both grown very well. As of October 15, 2021, shrimp exports to Germany and Belgium increased by 20% and 2%, respectively.

In the EU market, Vietnamese shrimp must compete with Argentine red shrimp suppliers. Besides, Vietnamese shrimp has to compete strongly with Ecuadorian suppliers. Ecuador has the advantage of low shrimp prices and easy transportation.

In the last two years, Ecuador has penetrated the European market with products ranging from peeled back and tailed shrimp to raw and steamed shrimp products. This year, while Asian suppliers to the EU market faced many difficulties in logistics, Ecuador took advantage of this opportunity to increase exports to the EU.

One year after the EVFTA between Vietnam and the EU took effect, Vietnam's shrimp exports to the EU market also recorded good growth. Products that are exempt from tax immediately after the agreement came into effect include HS code 03061792 and HS code 03061799.

However, the EU market strictly requires food hygiene and safety and traceability must be favorable, so many large shrimp producing and exporting enterprises in the Mekong Delta have invested in equipment and modern machinery, focusing on raw materials for production, ensuring strict requirements of importers.

After a sharp decline in 2020, the EU's economy is on the rebound and is forecast to return to normal from the beginning of 2022. It is forecasted that in 2021, the EU's economy can achieve a growth rate of over 5% compared to the previous year.

To recover the post-Covid-19 economy, the EU has activated many support packages and disbursed production recovery funds to rebuild commodity supply chains. In the last months of this year, the EU is very scarce in terms of goods because many of its supplier partners to the EU are struggling with the Covid-19 pandemic, plus the pressure of high sea freight rates while consumer demand at year-end among the EU people increased.

This is an advantage for Vietnamese shrimp exports to the EU. However, this advantage does not last long because in just six months to one year, new supply chains will become stable, and it will be more difficult for new enterprises to penetrate the market.

In addition, many other countries in the region have also promoted the negotiation of the EVFTA to exploit this potential market, so competitive pressure will gradually increase.

Therefore, Vietnamese enterprises, despite facing many difficulties after the quarantine period, must devote all resources to restore production, taking advantage of the current opportunity to consolidate and develop the market share in the EU market.

In the past few days, the emergence of many positive cases in the Mekong Delta provinces and spreading to seafood processing factories have put great pressure on ensuring safety and stabilizing production.

Shrimp exporters in the Mekong Delta are focusing on many solutions to control the virus, purchase raw materials for export production in the peak period at the end of the year, and seize opportunities to export shrimp to the EU market.