Shrimp exporters focus on added value
Processing shrimp for export at Sao Ta Company - a member of PAN Group |
According to Ms Kim Thu, a shrimp market expert of the Vietnam Association of Seafood Exporters and Producers (VASEP), in February 2023, shrimp exports to major markets simultaneously decreased by 12%-35%. However, some markets have shown signs of growth, such as China, Australia and France, increasing from 4-7%. Among the top five main import markets, shrimp exports to the US and EU decreased sharply while there were slight downtrends in Japan and Korea; In contrast, exports to China showed signs of recovery, up 4%.
In the first 2 months of the year, shrimp exports to the US, EU and Japan increased from 51-58 million USD to Korea 46 million USD and to China and Hong Kong 34 million USD. However, exports to these markets in the first 2 months of this year decreased by 16%-51% over the same period.
Regarding shrimp production output, shrimp farming is in a quality-oriented transitional. Particularly, in many places, farmers focus on renovating, repairing ponds and lakes, and focusing on the quality of seeds to eliminate diseases. Generally, in the first two months of 2023, white leg shrimp production reached 60.2 thousand tons, up 0.5%, and black tiger shrimp production reached 31.3 thousand tons, up 0.3%.
In the last months of 2022 and early 2023, demand for shrimp decreased due to escalating global inflation and world economic instability. Competition between Vietnamese shrimp with Ecuador and India this year is also more intense when Ecuador's shrimp output in 2023 maintains an increase of 1.5 million tons. As a result, the global imported shrimp price has plummeted further when the global supply in 2023 is on a bigger scale.
In the difficult context, businesses lift the obstacles by reducing costs, focusing on added value, and improving product quality. Enterprises can redirect exports of specific products such as shrimp-forest, shrimp-rice or black tiger shrimp with the advantage of the Chinese market. In addition, businesses need to focus on changing product structures to meet the needs of each market segment actively.
Therefore, besides challenges, there are still many opportunities that require the flexibility and adaption of businesses to dominate the market.
It is expected that Vietnam's shrimp exports will improve in the coming months when inventories in the US are released and the world economic situation changes positively. In particular, the North American Seafood Fair on March 12, 2023, is also a positive motivation to increase shrimp export sales to the US and other markets worldwide.
The shrimp industry has played an important role in Vietnam's seafood exports to the world during the past two decades. Annually, the industry contributes about 40-45% of the total seafood export value. Currently, Vietnamese shrimp is exported to 100 countries, of which the five largest markets include: Europe, the United States, Japan, China and South Korea.
In 2023, it is forecast that the shrimp industry will face many difficulties and challenges, such as climate change, drought, and saltwater intrusion occurring at the beginning of the year, increasing the risk of disease outbreaks and input costs increase. In addition, difficulties in the export market result from fierce competition with Ecuador and India. In 2023, Ecuador is estimated to produce more than 1.5 million tons of shrimp, twice as much as Vietnam's white leg shrimp (more than 700,000 tons).
Due to the large inventory, US shrimp imports are not expected to recover in the first half of 2023. Therefore, demand will still focus more on small-size shrimp with the priority in favour of Ecuador thanks to its abundant supply and the advantage of geographical location. In addition, the global inflation and conflict between Russia and Ukraine will also have great effects on shrimp exports.
According to VASEP, shrimp exports in 2023 will be very difficult, which can only reveal recovery signals from the second quarter with the price downtrend compared to 2022. Remarkably, the export value of Shrimp exports in recent months, especially in February 2023, only reached $251 million, a sharp decrease of 54.9%.
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