After experiencing a nearly 30% decline over the past 5 months, seafood exports from VietNam 2023 in the latter half of the year are relying on the demand from the United States and the stable purchasing power of the EU.

seafood exports from VietNam 2023

Difficulties In The First Six Months of 2023

In the latter half of last month, traders purchased 101-150 count shrimp per kilogram from Mr. Van Thu’s pond in My Xuyen, Soc Trang, at a price of 65,000 Vietnamese Dong. According to calculations, after 54 days of farming, Mr. Thu’s shrimp crop only broke even. “Many households in this community are facing losses in shrimp farming, so anyone who can make a small profit is happy,” he said.

In the shrimp farming areas of Soc Trang and Bac Lieu, shrimp prices have been declining for the past two months. “Shrimp prices are fluctuating too much now!” commented Mr. Ba Duong, who has been farming shrimp for 20 years in Vinh Loi district, Bac Lieu. At the end of last year, the price for 30-count tiger shrimp reached as high as 200,000 Vietnamese Dong per kilogram.

But now, the daily purchase price has decreased by 2,000-3,000 Vietnamese Dong, reaching less than 120,000 Vietnamese Dong per kilogram. “During the prosperous years like 2013-2014, shrimp farming could yield profits of 40-50%, but now achieving 20-30% is considered good,” commented Mr. Duong.

Mr. Ho Quoc Luc, Former Chairman of the Vietnam Association of Seafood Exporters and Producers (Vasep) and Chairman of the Board of Directors of Fimex, stated that shrimp prices have been continuously and significantly declining for the past two months. Currently, the decrease amounts to around 40% for all shrimp sizes.

In the first four months of the year, shrimp exports decreased by 36% to reach 887 million USD, according to Vasep. The average export prices and volumes of shrimp decreased by 9% and 29% respectively compared to the same period last year, as reported by Agromonitor, an agricultural market analysis and forecasting center. The weak demand along with fierce competition from Ecuador and India were the reasons for the decline.

In addition to shrimp, Tra fish exports also experienced a decline of 23% in volume and 34% in value in the first quarter of the year. According to data from the General Statistics Office, seafood exports for the first five months of the year reached nearly 3.4 billion USD, a 28% decrease compared to the same period in 2022. This has impacted the business performance of companies in the industry.

VNDirect Securities estimated that the total first-quarter revenue of listed seafood companies decreased by 32% compared to the same period in 2022 due to a sharp decline in average selling prices and export volumes. The gross profit margin of the industry narrowed by 5.1 percentage points, while production costs remained high. As a result, the net profits of these companies decreased by 74% compared to the same period last year.

vndirect seafood exports from VietNam

In Vinh Loi district, Mr. Duong mentioned that the purchasing power of seafood processing and exporting companies remains weak. The main market for their products is local traders who buy “oxygen shrimp” (live shrimp pumped with oxygen for transportation to buyers) for domestic sales. “However, the demand is also low, so they are very selective and do not buy all the shrimp from the ponds like during the high-demand period,” he explained.

Opportunities And Challenges

Assessing the prospects for the latter half of the year, VNDirect forecasts a positive recovery in the US market due to three reasons: cooling inflation, reduced inventory levels, and high demand during the year-end holidays. This is expected to increase Vietnam’s seafood exports from VietNam 2023 to the US by 40-50% in the latter half of the year compared to the first half. Currently, the US is the second-largest market for Vietnam after Japan.

“We have observed signs of recovery in this market in May, as the average export price of Tra fish showed an upward trend, and inflation in the US showed signs of cooling,” said VNDirect’s analyst team. Last month, the US CPI (Consumer Price Index) stood at 4.9%, the lowest increase in two years and lower than market expectations.

The EU market also maintains stable consumption. In the first quarter, seafood exports to the EU only slightly decreased by 4% as Europeans prefer Vietnam’s white fish at reasonable prices amid high inflation, which has led to tighter spending.

seafood exports from VietNam 2023

Most EU markets have increased their imports of Vietnamese Tra fish – Basa fish (Basa fish stomach), with many markets showing double-digit growth: Romania (36%), Sweden (53%), Denmark (34%), Bulgaria (49%). Some smaller markets have even recorded triple-digit growth: Germany (100%), Lithuania (429%), Finland (436%).

Expectations For Growth In The Last Six Months of 2023

Seafood exports from VietNam 2023. According to Agromonitor, the average export price of Tra fish to the EU in the first quarter increased by 9.5% compared to the same period. Therefore, experts expect the demand for Vietnamese Tra fish in the EU to remain stable in the latter half of the year due to the high inflation in the EU.

Regarding China, Vietnam’s seafood exports to the country have not met expectations, reaching $364 million in the first four months, a 30% decrease compared to the same period. Vietnam’s market share has also significantly decreased. In particular, shrimp faces strong competition from Ecuador and India, as these countries have increased their purchases while reducing orders for Vietnamese shrimp.

Chinese consumers are currently more cautious in their consumption behavior in the latter half of 2023. Due to the unpredictable macroeconomic conditions in China and intense competition from other countries, VNDirect predicts that seafood exports to China in the latter half of the year will not experience strong growth like in the past six months.

However, there is still hope for the Chinese market. Recently, the Ministry of Agriculture and Rural Development of Vietnam announced that it will work with the Yunnan Customs to propose the addition of fruit and seafood items, as well as allowing the export of live seafood from Vietnam through Yunnan’s border gate.

According to Ms. Le Hang, Director of Communications at Vasep, the Chinese market is showing some positive signals, especially after the Spring Festival. The tourism sector is attracting more Chinese and international tourists. Expectations are that the market will gradually become more vibrant starting from this summer.

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