After a sharp increase of 23% in November, seafood exports in December 2021 continued to increase by 29%, reaching over USD 940 million.

Strong recovery

After a sharp increase of 23% in November, seafood exports in December 2021 continued to increase by 29%, reaching over USD 940 million. In December 2021, exports of all key products increased sharply by 6-110%.

Thanks to a breakthrough increase in December, with a growth rate of about 80% to about USD 245 million, pangasius exports for 2021 exceeded expectations with over USD 1.6 billion, up 10%.

By the end of the year, shrimp exports had reached 3.88 billion USD, up 4%. Tuna exports totaled USD 757 million. Squid exports totaled USD 757 million and octopus exports reached over 600 million USD.

Seafood exports to China in December rebounded the most, increasing by 90% to over $170 million. However, exports to this market continuously decreased from March to October. The total export value in 2021 still decreased 14% compared to 2020 to reach 1.17 billion USD. China only accounts for 13% of Vietnam's seafood exports, up 16% in 2020 compared to 2020.

The US accounts for 23% of Vietnam's seafood exports with over 2 billion USD in 2021, up 26% compared to 2020. While seafood exports to the EU market account for 12% of total exports, with over 1 billion USD, this figure is up 12% from 2020.Exports to CPTPP countries in 2021 earned nearly 2.2 billion USD, almost equivalent to 2020.

Investment highlights in 2022

According to the Vietnam Association of Seafood Exporters and Producers (VASEP), in some provinces and cities such as Can Tho, An Giang, Dong Thap, and Ben Tre, the price of white meat pangasius of export standards is VND23,000–24,000/kg compared to VND21,000-22,000/kg previously. The rising prices of raw pangasius were because export processing enterprises boosted purchases to meet the rising orders during the holiday season in late 2021 and early 2022. Recent input cost surges may lead to limit ed supply, thereby creating favorable conditions for raw pangasius prices to spike.

KB Securities said the major export markets for seafood products would show signs of recovering demand in 2022 thanks to higher vaccine coverage and the "live with COVID" policy of many countries, which encourages restaurants and eateries to get back to normal operation. In addition, the prices of raw materials in the top producing countries are increasing, pushing up export prices in the coming months.

However, KB Securities said the appearance of the new COVID-19 strain would reduce consumption and increase competitive pressure from other major producing countries given the Omicron's global spread. While the effectiveness of current vaccines against this variant is still being studied, reimposing social restrictions in major export markets of Vietnam is very likely. What’s more, the increasing supply in India and Ecuador (Ecuador has a favorable location with the US, which is a large export market for Vietnam) is another potential risk.

Among shares of the seafood sector, KB Securities recommends watching Vinh Hoan Corporation's (VHC). Because the US remains VHC’s main pangasius export market, accounting for more than 40% of total revenue. With the vaccination rates in the US and EU increasing, VHC's 2022 export prospects will be very bright amid recovering demand and surging export prices. In addition, the pandemic affected raw pangasius purchases by many businesses, which also benefits VHC in the near future.