Fishery exports suspended due to Russia-Ukraine conflict

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Tra fish exports to Russia are suspended due to the conflict

In 2021, Russia is one of the potential markets in the export picture of Vietnam’s pangasius. The export turnover saw a year-on-year increase of 72.5% to VND32.5 million. However, the export to this market in early 2022 has faced problems and instability, so Vietnam’s Tra fish exporters have to suspend exports.

According to VASEP’s pangasius market expert, Ta Ha, in early 2022, five pangasius exporters shipped their products to the Russian market. However, the export value of pangasius to this market in January 2022 fell 29.8% to US$2.18 million compared with the previous year.

In 2021, due to the effects of the Covid-19 pandemic, the demand for importing pangasius fillets from Vietnam to Russia surged. Vietnam was one of the three largest exporters of white fish products to Russia followed by Argentina and China. Vietnam was a unique market supplying frozen pangasius to this country. Vietnamese pangasius enterprises still consider Russia a potential market.

Since the beginning of this year, especially after Russia launched a special military campaign in Ukraine, the pangasius exports to this market have been suspended and suffer from difficulties. According to some major exporters, the Russian ruble tumbled about 30% to the record low as West steps up sanctions, nearly 95 Rubles for 1 USD on March 1. Due to the sharp depreciation of the ruble, many importers do not want to pay for their orders. The payment via banks has been suspended.

Currently, exporters have suspended the signing of pangasius export orders to Russia although many importers still want to import products without interruption.

Shipping lines have notified that they do not accept shipping containers to Russia because they may be stopped at Rotterdam before arriving in Saint Petersburg and Vladivostok seaports.

Not only pangasius products but also the export of many other fishery products from Vietnam to Russia and Ukraine has been disrupted because the two markets are one of the 20 largest tuna import markets.

Therefore, many of Vietnam’s tuna shipments have to be suspended due to risks in banking transactions and disruption of the supply chain. Enterprises have to monitor the situation and handle inventory or export goods to other markets.

Statistics from Vietnam Customs show that by the end of 2021, the two countries imported a large quantity of Vietnam’s frozen tuna.

According to Ha, Vietnam’s tuna export turnover to Russia for the past ten years increased VND364 million in 2012 to over US$14 million in 2021.

Although the tuna export value to this market has not been stable in the last five years, it is on an uptrend and recovered after the pandemic. The tuna export value to Russia in 2021 rose 58% compared with 2020 and higher than in 2019, accounting for 2% of the total export of the country. The export to the market in January 2022 increased 427% compared with the previous year.

Ukraine is Vietnam's 19th largest tuna import market. The export value surged 58 times in 10 years from US$115 million in 2012 to US$6.8 million in 2021. In the last five years, tuna exports have increased continuously. In 2021 alone, the export value rose by 106% compared with 2020, and tripled compared with 2019.

In addition, Russia and Ukraine are the most important suppliers of sunflower oil to the global market, including Vietnam. Therefore, if the conflict between Russia - Ukraine continues to escalate, this will directly affect the tuna production and processing industry, including Vietnamese tuna exporters.