The US market will be the lifeline for shrimp exports

Minh Phu Seafood Corporation Joint Stock Company processing shrimp for export. Photo: ST

Mr. Truong Dinh Hoe, General Secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP), said that in 2021, shrimp export turnover will reach US$3.9 billion, up 4% compared to 2020. Soc Trang and Ca Mau are the two localities with the highest shrimp export turnover in Vietnam.

Currently, Vietnam has more than 500 shrimp exporters to 103 markets. Of which, the export turnover is up to 97%, focusing on eight main markets including the US, China, Korea, EU and UK.

According to Mr. Truong Dinh Hoe, the good news is that Vietnamese shrimp exports to the US have achieved a turnover of more than US$1 billion for the first time, with nearly 90,000 tons, up 20% compared to the previous year.

Meanwhile, for the European market, in 2022 shrimp consumption demand will start to increase again, especially in the UK, Germany, Netherlands, Belgium.

However, consumption in Europe will be affected by the Russia-Ukraine conflict which could partly affect future business needs and plans.

Regarding the source of raw materials for processing and export, according to Mr. Truong Dinh Hoe, in 2022, shrimp materials will be sufficient for processing, but the price may increase due to complicated fluctuations in input factors.

VASEP leaders also said that inflation will increase production costs, leading to an increase in selling prices and weakening the growth rate of orders. The Russia-Ukraine conflict has a strong impact on logistics costs and activities. This is not a small challenge for shrimp export growth.

According to a report by the Ministry of Agriculture and Rural Development, the shrimp production plan in 2022 with the demand for broodstock shrimp needs about 260,000-270,000, of which about 140-150 billion shrimp seed and 750,000ha shrimp farming area, shrimp production of all kinds 980,000 tons; export turnover is over US$4 billion, up 2.56% compared to 2021.

In order to achieve the shrimp production and export plans, at the shrimp export conference held in Soc Trang, Deputy Minister of Agriculture and Rural Development Phung Duc Tien said localities participating in the shrimp chain should be linked to each other, ensuring the continuous operation of the shrimp production chain, adapting to the conditions of the Covid-19 pandemic, promptly handling situations arising from the disease; at the same time strengthen inspection, examination, food hygiene and safety in aquaculture, in order to ensure the quality of products for processing, domestic consumption and export; implementing regulations on management of brackish water shrimp; monitoring the environment to promptly advise and warn farmers.

In addition, the Deputy Minister of the Ministry of Agriculture and Rural Development suggested that shrimp farming enterprises and households strictly comply with the provisions of the law on aquaculture, food safety and veterinary medicine; develop a plan to proactively produce in the new normal conditions, flexibly adapting to the Covid-19 pandemic; improve product quality, cooperate in chain production; comply with regulations on the use of banned substances, drugs, chemicals in shrimp farming.

In recent days, shrimp exports to Russia have been affected by the conflict between Russia and Ukraine. The shipments to Russia have been exported but it is not known whether they will be cleared or not and most shrimp exporters to Russia are currently facing difficulties in payment via banks.

The leading companies exporting shrimp to Russia are Minh Phu Seafood Joint Stock Company, Kien Cuong Import and Export Seafood Processing Joint Stock Company, Minh Hai Seafood Joint Stock Company, and Camimex Joint Stock Company.

According to the Ministry of Agriculture and Rural Development, the Russia-Ukraine tension causes Vietnam's agricultural trade with Russia and Ukraine to be significantly reduced. Those impacts come from the shutdown of the international payment system (SWIFT) of major Russian international banks; freezing the assets of large corporate banks; preventing import and export; stopping providing credit; supply chain disruptions, ruble devaluation, inflation, global stock market instability.

Vietnam will also be affected by risks of international payment, supply chain disruptions in import and export because major shipping lines have declared not to transport to and from Russia, leading to increased transportation costs; increasing the cost of imported inputs for basic goods; declining demand in Russia, Ukraine and related countries.

Faced this fact, the Ministry of Agriculture and Rural Development said that businesses closely monitor the situation and work closely with the Industry Association and the State Bank to assist in payments when there are goods exported to Russia but financial transactions are stalled.

Solutions are needed to deal with immediate difficulties due to market stagnation in Russia and Ukraine. Solutions to diversify export markets, including markets that previously had a large number of imports (EU, China, the Middle East, etc.) from Russia and Ukraine for products including seafood.

With the above actual situation, along with the advantage of exporting shrimp to the US, VASEP expects Vietnam's shrimp exports in 2022 to increase by 10 - 12%, export turnover to exceed US$4 billion. Of which, the growth is due to the price factor of 7-10% and the increase in output of 2-5%.