What is the solution to bring shrimp exports to over US$ 4 billion?

Processing shrimp for export at Minh Phu Group Joint Stock Company. Photo: Q.Hieu​

Export increased by 10-15%

Assessment of the Vietnam Association of Seafood Exporters and Producers (VASEP) suggests that Vietnam's shrimp exports will have a chance to recover and grow slightly in 2024, at a rate of 10% to 15% because the economic situation. of countries with shrimp consumption demand are gradually recovering; Enterprises promote the production of value-added products and deep processing. In addition, the demand for products with protein sources from aquatic products is gradually replacing protein sources from animals, so in the coming time, seafood, especially shrimp, has the opportunity to develop.

Regarding markets, the US and China will continue to be the two largest markets for Vietnamese shrimp export in 2024, accounting for about 40% to 45% of the industry's export turnover.

Currently, to reduce transportation costs due to tensions from the Red Sea, some shrimp exporters have chosen to redirect export to nearby markets, such as China, Japan...

The leadership of Sao Ta Food Joint Stock Company said that they would pursue the goal of exploring the large market near to Vietnam. In particular, the company would continue to strengthen the development of the Japanese market, maintain existing markets, and focus on understanding and step by step penetrating the Chinese market. At the same time, improve product diversification to suit factory conditions, especially promoting the production of deeply processed, value-added products.

The Vietnam Association of Seafood Exporters and Producers said that Sao Ta Foods was currently the largest Vietnamese enterprise exporting shrimp to Japan, ranked 5th in the US market and 9th in Korea.

The Japanese market was considered a "pedestal" for Sao Ta Foods' business activities in 2023. Focusing on taking advantage of the strength on deep processing and high product quality has helped Sao Ta Foods get many large orders from Japanese partners.

According to Ms. Le Hang, the company might have "plot twist" in export markets and export products and turn challenges into opportunities. For example, China was likely to attract more enterprises this year, because of its close geographical location, low transportation costs, and easier control. More importantly, China would certainly experience a reduction in supply from Ecuador due to both unstable security issues in this South American country and difficulties in shipping and increased costs... Therefore, China would have to offset supply resources from Vietnam and other Asian countries.

Along with that, enterprises will also tend to convert some export products. With the characteristics of easy preservation, long duration, and reasonable prices, canned, bagged seafood and dry goods will be more in demand this year in the context of war, conflict and inflation...

In addition, the growth of the small market is also the driving force for Vietnam's shrimp exports to grow this year.

Paying attention to exporting raw material sources

According to the Ministry of Agriculture and Rural Development, the brackish water shrimp farming area reached 737,000 hectares in the country in 2023, basically no increase compared to 2022. Output reached 1.12 million tons (up 5.5% over the same period in 2022), however export turnover only reached US$ 3.45 billion, down 19.8% compared to 2022.

The plan for 2024 is that the shrimp farming area is equivalent to 2023, and the export turnover is set to reach US$ 4 - 4.3 billion. To achieve today's goals, the shrimp industry needs to proactively source raw materials for export processing.

According to leaders of Sao Ta Food Joint Stock Company, currently, the company had 3 factories and 2 large shrimp farming areas with an expected supply output of over 16,000 tons/year. With this source of raw materials, in 2024, Sao Ta Food Joint Stock Company would improve and diversify products suitable for factory conditions, especially promoting the production of deeply processed, value-added products such as floured shrimp, stretched shrimp, fried shrimp, sushi shrimp...

As the largest shrimp capital in the country, leaders of Bac Lieu province said that the province currently had 48 export seafood processing factories, with modern equipment lines and a designed processing capacity of about 294,000 tons/year. Shrimp products had been processed to meet standards and penetrated demanding markets such as the US, Japan, EU, China, Korea and many other markets around the world.

Bac Lieu had been assigned by the Government to build the province into the capital of the shrimp industry. In recent times, the leaders of this province had paid attention to creating conditions for enterprises and shrimp farmers to develop high-tech shrimp farming models, especially in planned areas, with special priority given to models of advanced technology, self-contained, water circulation, environmental protection...

"Professional agencies, institutes and schools need to focus on supporting locality to soon find technical solutions for farming models, reducing risk rates, especially for intensive and super-intensive farming models"- proposed the leaders of Bac Lieu province.

In addition, enterprises want to expand shrimp export to Korea when this country removes quotas on Vietnamese shrimp. Ms. Kim Thu, VASEP's shrimp market expert, said that in the period from 2015 to 2023, after the VKFTA Agreement took effect, seafood products exported to Korea recorded significant growth. Of which, shrimp products alone increased by 37%.

However, currently, shrimp export to Korea was still facing the problem of import quotas. Enterprises were incurring significant costs to obtain quotas. The VASEP Association had proposed to the Government and the Ministry of Industry and Trade, hoping to pay attention and direct the consideration of abolishing quotas for Vietnamese shrimp exported to Korea within the framework of the VKFTA Trade Agreement at the review period in 2024.

According to VASEP, the current amount of Vietnamese shrimp exported to Korea had far exceeded the allowed quota (15,000 tons/year, 0% import tax), and the reality is that Korean importers have to "bid" to get Vietnam shrimp import quota with a significant cost, 14-16% of the shipment value.

“The increasing demand for shrimp in Korea due to the increasingly diverse dishes made from shrimp and consumers increasingly interested in a healthy and protein-rich diet will be an opportunity for enterprises to increase orders if the quota is lifted" - Ms. Kim Thu affirmed.