US businesses increase shrimp imports ahead of tax hike

Vietnamese enterprises are leading in deep processing of shrimp exports. Source: Internet.

Good signals from the US market

Vietnam's shrimp exports are showing many positive signs, especially in the US market.

According to information from the Vietnam Association of Seafood Exporters and Producers (VASEP), Vietnam's shrimp exports to the US in October this year reached more than 80 million USD, up 17%.

In the first 10 months of 2024, shrimp exports to this market earned 646 million USD, up 10% over the same period.

According to the analysis of Ms. Kim Thu, a shrimp market expert at VASEP, shrimp imports to the US from the three main sources have all decreased, which has increased concerns among businesses in this country about a shortage of supply for the market.

In addition, market sentiment and the economic situation are more optimistic, inventories are reduced, the oversupply situation has been rebalanced, so the demand for shrimp imports from the US is expected to be higher, shrimp prices in this market have also improved and are on the rise.

In particular, Mr. Trump's proposal to increase import taxes on goods into the US after his re-election has caused US businesses to tend to speed up the import of goods, to stock up on goods before the tax. Therefore, in the short term, the demand for imported goods from the US, including shrimp, will continue to increase.

The case of the US plaintiff suing the shrimp industry of many countries, including Vietnam, which benefits from government subsidies (CVD) is entering the final stage.

According to Mr. Ho Quoc Luc, Chairman of the Board of Directors of Sao Ta Food Joint Stock Company, the US Department of Commerce (DOC) has issued a preliminary CVD tax rate and a final tax rate for the Vietnamese shrimp industry of 2.84%.

During the process, Vietnamese enterprises have temporarily paid this tax to US Customs for shrimp shipments exported to the US from early April to early July 2024.

For shipments exported from July 1, 2024 to present, enterprises do not need to pay tax according to US law. Enterprises must make provisions in their books for these amounts to minimize risks.

However, this is not the final conclusion on the tax rate of the lawsuit. According to the order on December 5, 2024, the US International Trade Commission (ITC) will review and make a final decision, only concluding whether the lawsuit is formed or not.

If the ITC believes that the benefit from the subsidy affects the US shrimp industry, the 2.84% tax rate becomes official, becoming a significant barrier for the Vietnamese shrimp industry.

If the ITC believes that this subsidy does not significantly affect the US shrimp industry, the lawsuit will be dismissed.

This favorable situation, if realized, will make businesses exporting to the US very excited because this market still has opportunities and potential to penetrate and expand, and shrimp businesses that have sold goods here will be refunded by the US Customs for the temporary deposits for shipments sold here in the second quarter of 2024, and the reserve amount on the books will be converted into profit.

Growth in key markets

In addition to the US market, Vietnam's shrimp exports to China and Hong Kong in October this year reached 91 million USD, up 44%.

Accumulated to October 2024, shrimp exports to this market reached 676 million USD, up 31% over the same period.

According to VASEP, shrimp exports to China and Hong Kong are more positive, especially lobster exports increased sharply by 157% to 298 million USD in the first 10 months of this year.

China's consumption promotion policy also contributes to boosting imports of goods into this market.

A notable highlight in shrimp exports is that after fluctuating in previous months, Vietnam's shrimp exports in October to two Asian markets, Japan and South Korea, also recorded positive growth of 18% and 28%, respectively.

At the same time, Vietnam's shrimp exports to the EU increased by 32% in October, with a cumulative export turnover of 408 million USD in 10 months, up 17% over the same period.

The EU market's demand for Vietnamese shrimp imports has been quite stable this year, with continuous positive growth since April this year.

Shrimp export data for the first 10 months of 2024 shows positive signals in each import market. Exports to the US and EU both recorded stable growth.

China is implementing policies to promote consumption, which can help increase demand for shrimp imports from Vietnam.

Export shrimp prices are showing signs of increasing, especially white-leg shrimp, helping to improve profit margins for businesses.

Raw shrimp prices are also at a positive level, which will support production and exports.

Processed shrimp is growing strongly, which is a positive signal, showing that businesses are shifting to value-added products.

According to the assessment of some shrimp exporting enterprises, in 2024, unfavorable factors have changed more positively: inflation has cooled down, import demand from major markets has increased, shrimp output has not increased as "hotly" as last year, and world shrimp prices tend to increase.

"Although Vietnam's shrimp exports are still facing internal and objective challenges, they have recorded encouraging export results. The export turnover target of 4 billion USD in 2024 is completely within reach." - Ms. Kim Thu commented