Plenty of room for seafood exports

Processing aquatic products for export. Photo: T.H

Domestic raw material

According to VASEP, in the 2016-2020 period, Vietnam's seafood exports grew by an average of 5%, reaching US$8.4 billion in 2020. Of which, shrimp exports reached US$3.7 billion and fish exports reached US$1.5 billion and seafood exports reached US$3.2 billion.

According to the analysis of Mr. Truong Dinh Hoe, General Secretary of VASEP, seafood exports have fluctuated in the past five years due to fluctuations in demand, competition and import market barriers, such as anti-dumping tax, IUU "yellow card", SIMP program and production costs.

With the above development, VASEP estimates that by 2025, Vietnam's seafood exports will reach US$12 billion, growing at an average rate of 7% in the 5-year period (2020-2025). Specifically, shrimp will reach US$5.5 billion in 2025, an average growth of 8% per year in the period 2021-2025; pangasius US$2.2 billion, an average increase of 8% per year; and seafood US$4.2 billion, an average increase of 5% per year.

The export volume by 2025 is equivalent to about 6 million tons. Notably, seafood exporters will focus on domestically produced raw materials. In which, 4.7 - 4.8 million tons of domestic production; from raw materials imported from other countries for production, export and processing, it is expected to export about 1.2-1.3 million tons (equivalent to about US$2.4-2.6 billion). This provides a huge space for Vietnamese seafood exporters.

Many new distribution trends

Analyzing export market trends in the coming years, Mr. Truong Dinh Hoe said that the Covid-19 pandemic reduced the demand for seafood consumption in the immediate period, but will shape the trend of buying and selling online and promoting increased retail.

Besides, the trend of cooking at home will increase the demand of the retail segment through the supermarket channel, along with that is an increase in demand for convenient, instant, and ready-made products (canned goods, dry goods, convenient meals, etc.). This is also one of the great advantages for enterprises exporting seafood.

From 2021, the impact of the Covid-19 pandemic has increased demand for products with moderate prices, suitable for income levels, such as fish, small shrimp, surimi, and fish cakes. Consumers are increasingly interested in transparency, traceability, sustainability, social responsibility, and environmental responsibility of the production chain.

Among the most consumed aquatic species, shrimp demand will remain stable as it is the choice of consumers in major markets, such as the US, EU, Japan, and Australia. Demand for white fish species continues to increase.

Due to the post-pandemic economic situation, demand for whitefish and some small pelagic species is expected to increase more than other species. It is expected that the top major seafood import markets will include the US, Japan, China, Spain, France, Italy, Germany, South Korea, Sweden, and the UK. In particular, the demand of the US and China tends to increase, dominating the world seafood market.

Increased two-way trade between countries and markets that are members of bilateral and multilateral FTAs will mean firms can take advantage of preferential tariffs. At the same time, seafood processing workers moved from China to other Asian countries, due to the country's trade war with the US and due to the strict inspection policy of imported seafood during and after the pandemic.

For the domestic market, the main factors and trends that will dominate the development of Vietnam's fisheries in the next five years are analyzed by VASEP leaders, that is, the source of raw materials for export is diverse from aquaculture, domestic exploitation and import of legal sources will be the core to boost the competitiveness of Vietnam's seafood in the next five years.

It is expected that stable raw materials and modern processing capacity will continue to be the strengths of Vietnam's seafood processing and exporting enterprises. In addition, increasing the import of raw materials from other countries for export production and export processing, making the most of processing capacity, ensuring a stable and quality "supply" in the international market.

The increased consumption demand in the domestic market (expected to account for about 20% of sales) is also a great opportunity for businesses to consume products at home. Along with that, infrastructure for production and export (bridges, ports, traffic, cold storage) will tend to be invested and improved more from the budget and even socialization which has a positive impact on the industry's production and export.

One of the important factors in the current period, bilateral and multilateral free trade agreements along with trade promotion activities, such as product branding, image promotion of seafood and trade connections will be affect the development of Vietnam's seafood in the coming years.