By early October, shrimp exports brought Vietnam nearly 3 billion USD, up more than 10% year on year. Photo: Nguyen Hien

Opportunities for breakthroughs

In 2024, Vietnam's shrimp production and export have faced many major challenges. Regarding production, severe weather conditions occurred nationwide. In details, heat waves in the Central region, drought in the Central Highlands, saline intrusion in the Mekong Delta and storms and floods in the northern localities have severely hit and significantly impacted the aquaculture industry.

In terms of trade, shrimp exports also faced obstacles due to the global economic crisis, high inflation in key import markets, complex shrimp diseases and high production costs. However, it is forecasted that global shrimp output will recover by the end of 2024 and stabilize in 2025. Frozen shrimp exports are still affected by the price trend that has not clearly recovered, along with competitive selling price pressure with Ecuadorian and Indian shrimp.

In fact, Vietnam's processed shrimp still has a good position in the markets. Therefore, processed white-leg shrimp exports still increased by nearly 10%, while frozen white-leg shrimp exports increased slightly by 4.5%. Vietnam's brackish water shrimp output exceeded 1.1 million tons in the first 3 quarters of 2024. As of early October, shrimp exports brought Vietnam nearly 3 billion USD, up more than 10% over the same period last year.

Notably, on October 22, 2024, the US Department of Commerce (DOC) announced the final results of the anti-dumping (AD) and countervailing duty (CVD) investigations on frozen warm-water shrimp imported from a number of countries including Ecuador, Indonesia, India and Vietnam. Among the countries under investigation, Vietnam's tax rate was lower than that of India and Ecuador.

Thus, with the US imposing higher anti-dumping and anti-subsidy taxes on shrimp products from Ecuador, India and Indonesia at the end of December 2024, the Vietnamese shrimp industry will have the opportunity to take advantage of this in the coming time. This is an encouraging result for Vietnamese shrimp production and export enterprises.

Along with that, the year-end holiday season will still be an opportunity for our country's shrimp exports to explode. Accordingly, exploiting the room from the markets with many deeply processed products will help this billion-dollar industry continue to grow and contribute positively to the seafood industry's export target of 10 billion USD.

Specifically, the UAE committed to eliminating tariffs as soon as the CEPA Agreement takes effect for many key and potential export industries of Vietnam, creating a favorable basis for promoting the export of Vietnamese goods to this market and from there to Middle Eastern countries. The agreement also includes many provisions to facilitate trade and investment, in line with current trends of digital transformation and green development. In particular, the UAE will open its doors to almost all Vietnamese products with export advantages, including the high demand for high-end seafood in the UAE, especially shrimp and fish products, the Vietnamese seafood industry will have more opportunities to increase exports and increase product value thanks to incentives from CЕРА.

Opening the door to exporting shrimp to the UAE

In addition to the above opportunities, the recent signing of the Vietnam - UAE Comprehensive Economic Partnership Agreement (CEPA) between Vietnam and the United Arab Emirates (UAE) will also open a big way for Vietnamese shrimp to penetrate deeper into the Middle East - Africa market.

Specifically, the UAE commits to eliminating tariffs as soon as the CEPA Agreement takes effect for many key and potential export industries of Vietnam, creating a favorable basis for promoting the export of Vietnamese goods to this market and from there to Middle Eastern countries. The Agreement also includes many regulations to facilitate trade and investment, in line with current trends of digital transformation and green development. In particular, the UAE will open its doors to almost all Vietnamese products with export advantages, in which with the demand for high-end seafood in the UAE, especially shrimp and fish products, the Vietnamese seafood industry will have more opportunities to increase exports and product value thanks to incentives from CERP.

According to the Vietnam Association of Seafood Exporters and Producers (VASEP), the UAE is currently among the 20 largest markets for Vietnamese shrimp, with a turnover of around 20 million USD/year. In the period from 2018 to 2022, the UAE ranked 16th among Vietnam's shrimp export markets, accounting for about 0.5% of total shrimp export turnover to markets. Although it is a small market, the UAE is considered a potential market because the demand for seafood, including shrimp, is increasing day by day, especially when the Vietnam - UAE Comprehensive Economic Partnership Agreement (CEPA) has just been signed, opening up more opportunities for shrimp exports to this market.

In the first 9 months of this year, shrimp export turnover to this market reached 7.4 million USD, accounting for 0.3% and growing 34% year on year. The main shrimp products exported to this market include: fresh frozen black tiger shrimp, steamed and frozen PDTO white leg shrimp, fresh frozen EZP shrimp, whole frozen black tiger shrimp, steamed and frozen white leg shrimp, fresh frozen PD shrimp, frozen breaded white leg shrimp, fresh frozen white leg shrimp, fresh frozen Nobashi white leg shrimp... Thus, it can be expected that with the newly signed CEPA Agreement, Vietnamese shrimp will enjoy the highest and earliest tax incentives, in order to increase market share in this market.

According to experts, CEPA is the first FTA that Vietnam has negotiated with an Arab country in the Middle East and Africa and is the first step in promoting relations not only with the UAE but also expanding to the Middle East, Africa and European markets. However, UAE is also one of the fiercely competitive markets in terms of price and quality.

In addition, the requirement for Halal certification is very important for imported goods to Arab countries. Moreover, this is not a traditional market, businesses need to make more efforts to compete with other countries that have been familiar with these import regulations for a long time.

Therefore, Vietnamese seafood production, processing and export enterprises need to actively research and apply advanced science and technology in production, change management methods, minimize intermediate costs, in order to reduce product prices, increase the competitiveness of Vietnamese products. Especially, it is necessary to focus on building a Halal standard certification system for shrimp products when exporting to this market.