Shrimp processing for export at Sao Ta Food JSC. Photo: Provided by the company

Export to the Chinese market sees significant growth

According to the Vietnam Association of Seafood Exporters and Producers (VASEP), shrimp exports reached US$328 million in June 2023, a decrease of 21% compared to the same period in 2022. This decline was lower than the previous months (ranging from 28% to 35%).

In June 2023, shrimp exports to major markets such as the US, Japan, the EU, and South Korea continued to decline significantly. However, it is noteworthy that exports to the Chinese and Hong Kong markets recorded positive growth for the first time since the beginning of this year.

Based on statistics from the Vietnam Customs, June marked the first month this year that shrimp exports to China have increased compared to the same period last year, rising by 19% to reach US$59 million. In the first half of this year, shrimp exports reached US$239 million, a 19% decrease compared to the same period. The rate of decline has gradually slowed since March 2023.

According to data from Chinese Customs, shrimp imported to China in May surged by 77% compared to the same period last year, reaching 100,310 tons. The import value increased by 55% to US$579 million. Overall, in the past five months, shrimp imports rose by 48% to 415,305 tons, and the import turnover also increased by 28% to US$2.3 billion.

Along with China, shrimp exports to some smaller markets in June have recorded positive growth compared to the same period last year, such as Australia with a 9% increase, the UK with a 23% increase, Taiwan with a 20% increase, and Switzerland with an 86% increase.

However, shrimp exports to the EU in each month from March to June this year have all seen a decrease of more than 40% (ranging from 41% to 56%) and showed no signs of cooling down. In the first six months of this year, shrimp exports to the EU reached US$193 million, a 49% decrease compared to the same period.

According to Dr. Ho Quoc Luc, Chairman of the Board of Directors of Sao Ta Food JSC, in the EU market, Vietnamese shrimp has faced strong competition from Ecuador due to Ecuador's abundant supply of raw materials (harvesting hundreds of thousands of tons per month) at good prices. Ecuadorian shrimp dominates the EU market in the segment of average and fairly processed products. In this market, Vietnamese shrimp only maintains an advantage in the high-end segment.

Similarly, the Japanese market imported US$236 million of shrimp from Vietnam in the first six months of this year, a 29% decrease compared to the same period. Vietnamese shrimp exported to Japan in June 2023 decreased by 35%, the deepest decline since March this year.

In the Japanese market, Vietnamese shrimp also faces fierce competition with shrimp from India and Ecuador. While the largest supply from Vietnam to Japan has decreased, Japan has significantly increased imports of shrimp from India and Ecuador, by 44% and 49%, respectively.

Moreover, shrimp exports from Vietnam to Japan in the early months of this year also encountered difficulties due to the sharp depreciation of the Japanese yen. By early July 2023, the yen had depreciated too much, reaching over 145 yen for one USD, making it challenging to sell shrimp in this market as the selling price had to be reduced following the depreciation trend of the yen.

A ray of hope for shrimp export businesses

According to the analysis of businesses, both the US and Chinese markets have a similar trend of higher shrimp export turnover in the following month compared to the previous month, and the rate of decline in each month has been gradually decreasing. These two markets are considered the "ray of hope" for shrimp exports in the second half of this year.

Shrimp exports from Vietnam to the US in the first six months of this year reached US$299 million, a decrease of 38%. In June of this year, shrimp exports to the US decreased by 23%, the lowest decline since the beginning of the year. The value of shrimp exports to the US in June reached over US$71 million, the highest value since the beginning of this year. This raises expectations that low shrimp prices in the US have bottomed out, and shrimp consumption for the year-end will increase.

According to the analysis of Kim Thu, a shrimp market expert at the VASEP, shrimp exports from Vietnam from July onwards, although they may not recover compared to the same period last year, the rate of decline is expected to gradually narrow. In the current difficult situation of the shrimp industry, the main concern is how to persuade shrimp farmers to feel at ease about investing in breeding shrimp in the future. It is a very challenging problem that requires time and the joint efforts of the entire industry chain, in which the roles of State support and management cannot be ignored, according to the proposal of Luc.

This is a positive signal for seafood processing and exporting businesses. Most recently, on July 12, Deputy Prime Minister Le Minh Khai requested relevant agencies to consider and handle in accordance with regulations the proposals of the VASEP regarding solutions to resolve difficulties for seafood businesses.

Simultaneously, the Deputy Prime Minister directed the State Bank to take the lead and coordinate with the MARD and other relevant ministries and agencies to consider and handle proposals to adjust interest rates for loans, provide credit, and restructure debts in accordance with the solutions prescribed in Resolution No. 88/NQ-CP dated June 8, 2023, and the VND10 trillion credit package to support manufacturing and processing businesses in the forestry and seafood sectors, in accordance with the Prime Minister's guidance in Announcement No. 167/TB-VPCP dated May 1, 2023.