Despite many advantages, the country's seafood export turnover in the first 7 months of 2024 only reached 5.29 billion USD, accounting for 2.3% of the total export commodity structure.

In fact, the seafood industry is facing many difficulties and challenges and is striving to reach the 2024 target with an estimated export turnover of 9.5-10 billion USD.

Difficulties prevail

Sharing about the difficulties of the shrimp industry, Mr. Tran Van Linh, Chairman of the Board of Directors of Thuan Phuoc Seafood and Trading Company (Da Nang) said that the current shipping freight rate from Vietnam to Europe is around 4,000-5,000 USD/container, 2-3 times higher than the end of last year. On average, a container exported to the US costs about 6,000-7,000 USD, double the price. Freight rates to regions such as China, Japan, Korea and Southeast Asia have also increased, fluctuating between 1,000-2,000 USD/container.

"In addition to the increase in freight rates, the time to transport goods also takes longer by 7-10 days, making it extremely difficult for businesses," Mr. Linh expressed.

Sharing the same view, Mr. Le Van Hong, Director of Ba Hai Joint Stock Company (Phu Yen), commented: “The cost of shipping containers to Europe increased from 2,000 USD/container to 5,500 USD/container, all of which are borne by businesses. I hope the State will pay attention to helping reduce bank interest rates, open up lending policies to create additional capital sources, and increase the endurance of businesses.”

In particular, according to the Vietnam Association of Seafood Exporters and Producers (VASEP), the two main export products of the seafood industry are pangasius and shrimp. Although there is growth, export enterprises in this field are also facing many difficulties.

In the first months of the year, China and Hong Kong (China) continued to be the largest import markets for Vietnamese pangasius. In the first half of this year, Vietnamese pangasius exports to this market reached more than 258 million USD, down 8% over the same period.

The next market is the US. The export value of pangasius in the first 6 months of the year to the US reached 160 million USD, up 14% over the same period last year.

Along with the US market, Vietnamese pangasius exports to the CPTPP market block also recorded positive growth in the first half of 2024 with an export value of 128 million USD, up 11% over the same period last year.

However, according to VASEP, although the Chinese market is the main driving force for growth, the price of Vietnamese pangasius fillets in China is very low, only about 1.8 USD/kg. Therefore, Vietnamese enterprises exporting to this market can only rely on by-products such as pangasius bladders...

The shrimp industry is also facing two major problems: low shrimp export prices to markets due to competition with Ecuadorian and Indian shrimp. Another problem is that diseases in farmed shrimp are complicated and have not been resolved, potentially causing a shortage of shrimp raw materials in the second half of 2024.

“Shrimp export prices to markets are low, competing heavily with Ecuador and India. In particular, although Ecuador's shrimp industry faced many difficulties in 2024, this country still increased exports and flooded markets, including Japan, Australia, and the EU. Currently, Ecuador has a large market share in markets such as the US, China, and even India. Besides, the shrimp industry is also facing disease problems, specifically TPD disease," said Ms. Le Hang, representative of VASEP.

Efforts to find growth drivers

Sharing about the story of shrimp export, Mr. Ho Quoc Luc, Chairman of the Board of Directors of Sao Ta Food Joint Stock Company, said that the growth motivation of the shrimp industry is to focus on the stage of understanding and penetrating the market; listening to consumer needs and trends to promptly respond and attract. However, this motivation will be hindered if prices are high.

The growth driver of the shrimp industry is the importance of market research and penetration.

“That is the current bottleneck of the shrimp industry, because the cost of our farmed shrimp is still too high. The reason why the cost of farmed shrimp is still too high is due to many factors, such as the quality of shrimp seeds, the farming environment, and the farming capital,” Mr. Luc emphasized.

According to Mr. Luc, to overcome difficulties, the export processing stages must be more proactive than ever, such as solutions to research new products, even responding to each festival and event. In addition, finding new customers through self-improvement to meet the requirements of high-end distribution systems, implementing sustainable solutions such as emission reduction roadmap, ensuring animal welfare, ensuring the use of recycled materials... and this commitment has a third party to monitor and certify...

Commenting on the last months of the year, experts noted that according to market rules, from the third quarter onwards, importers will increase purchases to prepare supplies for the holidays and Tet at the end of the year. Therefore, shrimp prices from the third quarter onwards are likely to improve compared to the present, but are unlikely to increase sharply.

Therefore, farmers need to consider and choose the appropriate farming model and density to ensure a high success rate to reduce production costs and harvest large shrimp with more stable prices.

Expect new signals

Vasset Management Services (VSM; VSM Team) has just released a macro strategy report titled “Growth dynamics with decreasing pressure towards the end of the year”.

Although there are many prospects for recovery in the second half of 2024, VSM Team still has a neutral view on the seafood industry because it depends on “many uncertain factors”.

In 2024, the seafood industry's goal is to achieve an export turnover of 9.5 to 10 billion USD, an increase of 8% over the same period. Considering the general situation, VSM Team expects major markets to recover when many central banks signal interest rate cuts in the second half of 2024.

However, VSM Team also pointed out many external factors that may have an impact such as anti-dumping tax rates; political tensions causing freight rates to skyrocket; IUU yellow card, competition with seafood from many other countries requiring capacity improvement of domestic enterprises.

According to VSM Team, shrimp exports to China in the last months of the year will benefit from its geographical advantage and this country is limiting shrimp sources from Ecuador and India due to sulfite residues.

Regarding the Japanese market, VSM Team experts assess that although demand is recovering slowly, it still prefers deeply processed products, which is an advantage of Vietnamese shrimp compared to shrimp from other countries. Therefore, businesses with deep processing capabilities focusing on this market will benefit. For example, Sao Ta Food Joint Stock Company focuses on deeply processed shrimp, focusing on the Japanese market.

VSM Team assesses that Vietnamese pangasius exports in the last months of the year will continue to benefit from the US and the West's ban on pollock from Russia. Accordingly, the export price of pangasius is expected to recover slightly, mainly due to a shortage of supply. The main reasons for the shortage of supply are low prices and unfavorable weather, causing many farmers to limit new farming.

Regarding pangasius exporting enterprises, VSM Team believes that Vinh Hoan is a leading enterprise, capable of expanding the market and managing costs well, especially enjoying zero anti-dumping tax in the US market, so it has the most positive business prospects among pangasius exporting enterprises. The remaining enterprises such as Multinational Investment and Development and Nam Viet are also expected to recover their exports.

Deputy Minister of Agriculture and Rural Development Phung Duc Tien said that in order to export seafood sustainably, the most important thing now is to remove the IUU yellow card; enterprises diversify their export products; promote trade promotion both domestically and internationally; timely remove obstacles and bottlenecks affecting exports...

Accordingly, VASEP expects that in the last months of 2024, major import markets will show better signs, inventory problems and transportation difficulties will be reduced, demand will recover and prices will increase, ensuring the seafood industry's target of reaching the 2024 target.

Source: Kinh Te Nong Thon Newspaper