Shrimp exports reach 10 billion USD

	2018 - tough year for shrimp exports
	Vietnam’s shrimp exports face technical barriers in Korea
	Many challenges await Vietnam’s shrimp export to US

Businessmen introduced shrimp products at the recent exhibition. Photo: T.H.

The business overcome difficulties

Due to many reasons, especially decrease of shrimp export price, high technical costs have made shrimp processing enterprises encounter difficulties. Enterprises are trying their best to promote market expansion and channel products to foreign countries. Mr Le Van Quang, Chairman of the Board of Directors, General Director of Minh Phu Seafood Corporation, said that the potential export markets of Vietnam, Japan and Europe, control antibiotics very strictly in shrimp products. Minh Phu Seafood Corporation has been investing in antibiotic testing laboratories in breeding areas with an average investment cost of VND 10 billion per room to control the antibiotics in seafood products. The antibiotic test fee for 1 kg of raw shrimp is about 6,000 VND (approximately 9,000 VND per kg of finished product). This cost makes enterprises’ price for export shrimp products increase, so businesses must try to overcome difficulties to meet the export volume. According to Mr Le Van Quang, at present, shrimp prices are at the lowest level, this is different from the previous year. Supply from other countries increased, US shrimp inventory level has increased, there is not enough room to store shrimp products, so Vietnam’s shrimp can’t be delivered to partners although there are many orders.

Also specializing in shrimp products, business results in November 2018 of Sao Ta Food JSC has increased 3% over the same period in 2017, reached $ 16.2 million. It is reported that shrimp output in November reached 1,937 tons, up 33% over the same period in 2017. The reason is that the company has bought a lot of raw shrimp material to meet export contracts.

By the end of November, Sao Ta Foods ISC achieved 106.2% of the total sales target of the year. The company's profit was over 180 billion VND. Company representatives said that shrimp ponds are harvesting, while it is expected 54 additional shrimp ponds are to be completed in December to prepare for the 2019 crop. In addition, FMC is looking for land for expansion, serving raw materials for export production next year.

Assessing the situation of the shrimp industry, Vietnam Association of Seafood Exporters and Producers (VASEP) announced that shrimp export is expected to reach about $ 3.6 billion, down 5% compared with 2017 at the end of this year.

Currently, the EU is Vietnam's largest shrimp import market, accounting for 24.7% of total shrimp export value of Vietnam. In the first two quarters of this year, Vietnam shrimp exports to EU increased sharply, while shrimp exports to big markets such as USA, China and Japan decreased. However, in the third quarter, shrimp export to EU market began to decline. At present, Vietnam’s shrimp products still maintain its competitive advantage over other major competitors in the EU market such as India and Thailand. These rivals are increasingly reducing exports to the EU due to problems of meeting quality standards. However, Vietnamese seafood enterprises are putting great expectations on the bilateral agreement that Vietnam will sign with the European Union (EU). The European market is the largest market for Vietnamese shrimp products and it’s also a market with highest tax rate. If a trade agreement with the EU is signed, Vietnam's seafood exports to the EU will be taxed at zero, while Thailand’s shrimp exports are still at 20%, creating a huge advantage for Vietnamese enterprises.

The export market to the US is still abundant

According to VASEP, white leg shrimp is the dominant product in shrimp export structure to America, accounting for over 80% of Vietnam shrimp export to the US. Over the past few years, the US has maintained its highest position in Vietnam's white shrimp imports. Overall, the US is Vietnam's second largest shrimp import market after the EU, accounting for 18.2%. Shrimp export’s average turnover to the US reaches $ 700 million per year, in 2014 a sudden growth in shrimp exports to the United States reached more than $ 1 billion. From the beginning of 2018, Vietnam's white leg shrimp export to this market still accounts for 81% of total shrimp export structure.

In 2013, the US became Vietnam's No. 1 whiteleg shrimp market. From 2013 to 2017, the proportion of whiteleg shrimp exported to the US was always higher than that of giant tiger prawn. In this period, the export value of whiteleg shrimp was always nearly 3 times higher than that of giant tiger shrimp. VASEP said that whiteleg shrimp exports in particular and shrimp in general to the US market in 2017 did not increase, but in the 3 months of August, September and October this year it has recovered positive growth.

With competitors such as Thailand reducing exports to the US, and the US-China trade war, Vietnam white leg shrimp has many opportunities in the US market. With the above advantages and the level of white shrimp farming in Vietnam being quite high, the large output of up to 350,000 tons per year should be left to Vietnam to export white leg shrimp to the US. The final result of the anti-dumping duty of Vietnam shrimp during the 12th administrative period of review - POR12 (from 1 February 2016 to 31/1/2017) is much better than the previous review. This has helped Vietnamese shrimp farmers to boost their sales to the US market in the coming time, especially the buying period by American importers for the holidays at the end of the year.

Along with Pangasius, shrimp is the key export item of the Vietnam seafood industry, however, export turnover in 2018 is lower than the previous year. Analysis of seafood export data shows that these two main export products have had opposite results. While pangasius export maintained good growth, shrimps fell sharply.

VASEP urges boosting shrimp exports to US The Vietnam Association of Seafood Producers and Exporters (VASEP) has proposed to the State to find solutions ...

Specifically, over the same period in 2017, shrimp export in November continued to decrease by over 19%, reached $290 million, bringing the total shrimp export to 11/2018 to reach nearly 3.3 billion USD, down 7% over the same last year. It is expected that shrimp exports this year will reach USD 3.6 billion, down 5% compared to 2017. Although the market is still abundant, the shrimp export target of $ 10 billion for 2020 has a long way to go to achieve the mark. It needs more efforts from shrimp exporting enterprises ...