Many factors affecting tuna exports in the last months of the year

Processing tuna for export at Binh Dinh Seafood Company. Photo: T.H

War escalation concerns

In recent years, Israel has always been Vietnam's leading tuna export market after the US and the EU. Therefore, the recent escalation of Israel-Iran tensions is affecting Vietnam's tuna exports to this market.

According to statistics from Vietnam Customs, tuna exports to Israel in 2023 increased by 37% compared to the previous year, reaching more than 50 million USD. On July 25, 2023, the Vietnam - Israel Free Trade Agreement (VIFTA) was signed, creating many favorable conditions for Vietnam to promote seafood exports, including tuna to this market.

According to Ms. Nguyen Ha, a tuna market expert of the Vietnam Association of Seafood Exporters and Producers (VASEP), by 2024, tuna exports to this market have grown continuously since the beginning of the year.

However, in the past 3 months, exports to Israel have shown signs of instability, with a 31% decrease in July. In August, exports to this market increased again with an increase of 20% over the same period.

The Israeli market is a potential tuna export market for Vietnam. Although the Middle East has long been plagued by conflicts, tuna exports to this market have still increased.

With the recent conflict between Iran and Israel, no tuna businesses have reported being affected. But in the future, exports to this market will fluctuate more or less.

In addition, the Middle East is the central region of 3 continents: Asia, Europe, Africa, so if a conflict occurs, it can cause congestion of maritime transport, including the Gulf of Aden, which is the shortest route between Europe and Asia.

International trade through this strategic route accounts for 12-13% of total world trade, and Vietnamese seafood exports also pass through this bay, through the Red Sea.

High prices of imported raw materials

According to businesses, this year, domestically caught raw tuna is more difficult to purchase than previous years due to regulations on the minimum size of skipjack tuna allowed to be caught, so businesses have to increase imports.

The price of imported tuna is currently higher due to additional transportation and financial costs, which are included in the product price. Moreover, businesses have just gone through a difficult period with declining exports and are now expecting a recovery during the year-end holidays.

Enterprises believe that if the Israeli market is blocked, inventories will increase, and slow capital circulation will make it even more difficult for enterprises. According to VASEP, in the structure of tuna export value in recent years, more than 50% of the value is created from imported raw materials because domestic exploitation cannot meet the demand for export processing and is unstable.

According to Ms. Cao Thi Kim Lan, General Director of Binh Dinh Seafood Joint Stock Company, every year, Vietnam welcomes an average of over 20 foreign fishing vessels and freezer vessels transporting hundreds of thousands of tons of raw tuna directly into Vietnam for sale to businesses. The raw material supply chain in Southeast Asia has shifted to Vietnam instead of only Thailand as before.

Vietnam is becoming a priority destination for global raw material suppliers, because businesses have large production capacity, superior technology and, most importantly, the raw material import policy has been flexible and open, with preferential tariffs, facilitating import procedures, etc., thereby creating prestige with major suppliers.