Shrimp businesses respond flexibly to the market

	Shrimp exports grow 44% on effective use of FTAs
	The US market will be the lifeline for shrimp exports
	Shrimp exports have the opportunity to reach over US$4 billion

Shrimp processing for export. Photo: N.H

Flexible market strategy

According to the analysis of Ms. Kim Thu, the shrimp market expert of VASEP, shrimp exports in recent months to major markets are not expected to fluctuate much and depend on the supply of raw shrimp.

From the beginning of May, the weather tends to be unfavorable for farmed shrimp; the first rain of the season is earlier than usual, affecting shrimp production, so the source of shrimp materials is not as positive as in the first four months of the year. Therefore, in the next few months, it is likely that shrimp materials will be in short supply.

Shrimp exports tend to slow down. Starting from June, export turnover decreased by 1% over the same period last year because of the shortage of raw materials. In July, shrimp exports continued to decrease by nearly 13%, reaching US$385 million. In seven months, shrimp exports brought in US$2.65 billion, up 22% over the same period last year.

According to Ho Quoc Luc, Chairman of the Board of Directors of Sao Ta Food Joint Stock Company, looking at rival shrimp powers, although the information is not official, it is clear that Ecuadorian and Indian shrimp dominate the US market and tend to spill over the EU, especially Ecuadorian shrimp accounted for the highest percentage of shrimp imported into the EU in recent years.

Faced with the above fact, the flexibility of Vietnamese shrimp entrepreneurs has responded quite effectively. It is a flexible market strategy and a phased market strategy, possibly year by year.

Due to the limited source of raw shrimp and high input prices, Vietnamese shrimp businesses focus on deep-processed shrimp products and redirect the market accordingly. "Although it is known that the market redirection cannot achieve results in a short time, shrimp entrepreneurs must have a look at the trend and the situation in order to make the necessary preparations," said Ho Quoc Luc.

According to Ms. Le Hang, Deputy Director of VASEP.PRO Center, domestic shrimp production and world shrimp demand are forecast to be negative in the last months of the year.

Shrimp supply of producing countries increases sharply, the import volume of main markets such as the US and EU increases in the first half of the year, which will lead to an increase in inventories and a slowdown in demand in the second half of the year. Meanwhile, the domestic production of raw shrimp is facing difficulties because of the weather and the costs are too high, so there will continue to be a shortage of raw shrimp in the second half of this year, affecting the fulfillment of export orders of the enterprise.

Increase profit margin

According to experts, with the current high price of raw shrimp, if shrimp is processed, popular goods will not be profitable. But if high-end products are processed, the profit margin is still quite good. Shrimp entrepreneurs focus on preparing the necessary conditions to convince customers. The trend of consumers always wanting products that integrate as many utilities as possible, the above preparation is in the right direction and if you really make the effort, the results will come soon.

If they want to make sales more and more active and develop, businesses always create a strategic product image. That is, instead of spreading evenly for many products, businesses should calculate and choose which products they can process that is outstanding and attract customers. The main product will attract customers, and then it will be the step to spread the remaining products. Otherwise, the product of that business is only evaluated at a low price. The strategic product can be an existing product, and better yet, a new, less competitive product that will have better benefits.

Citing a practical example from his business, Mr. Ho Quoc Luc said at this time Sao Ta has many strategic products, such as shrimp with flour, fried shrimp and will continue to build more new strategic products in the near future. Sao Ta has actively developed a new market strategy for the past two years on the basis of identifying the growth rate of output and the ability to improve the processing level of Ecuadorian shrimp.

Sao Ta moving into the near market has many advantages by matching its strengths. Sao Ta's sales will not grow strongly, only slightly above the industry level, but profit margins will certainly improve, and profit for the whole year will always reach a high level, exceeding the set plan.

Of course, Sao Ta still maintains and takes advantage of opportunities in the US and other markets, focusing on the segment of deep-processed products.

According to experts, although there are still many difficulties, this year's shrimp export sales will certainly be higher than last year; at least 10% even though the output does not increase or increase slightly though the real nature of the shrimp exports of world market prices did not increase. Export sales increased because shrimp businesses focused on more deeply processed products with higher consumer prices and increased selling prices partly because of the hidden cost of chartering transport.

Today's difficulties are only temporary so the coming years will continue to be a breakthrough to raise the level of processing and position of Vietnamese shrimp in the world market; the value chain of Vietnamese shrimp will be more balanced and complete.