Seafood export enterprises are recovering their footing

According to Vinh Hoan Seafood Joint Stock Company, company operations began to improve in the second quarter of 2023 and are likely to improve dramatically in the second half of this year.

Exports to the United States and China, in particular, climbed by 31% and 43%, respectively, in the second quarter of 2023 compared to the first quarter of 2023. At the same time, the gross profit margin in the second quarter of 2023 increased to 20.7%, up from 17.3% in the first quarter. Orders in the third quarter of 2023 have increased in both number and price when compared to the second quarter of 2023, which is encouraging.

The company's product inventory at distributors and retailers in the United States has declined on average, particularly in the United States - Vinh Hoan's top and most important market. Furthermore, the consumer confidence index is rising. These considerations, together with the approaching holiday season, may drive local firms to expand their stock levels. Furthermore, the United States Department of Commerce has formally released preliminary findings for the 19th administrative review (POR19) for Vietnam's frozen pangasius fillet exported to the United States, with Vinh Hoan Seafood one of two enterprises benefiting from a zero anti-dumping duty rate of USD 0/kg.

In terms of the European market, Vinh Hoan Seafood's shipments to this region climbed by 22% in July compared to the same month previous year. Similarly, shipments to China climbed by 13%, while exports to the rest of the world (ROW) increased by 20%, according to a spokesman from Vinh Hoan Seafood Joint Stock Company.

Similarly, several Vietnamese seafood export enterprises began to show signs of life in the early third quarter. In particular, Sao Ta Food Joint Stock Company consumed approximately 1,900 tons of finished shrimp products in July 2023, generating a revenue of USD 21.3 million, an increase of 19% in terms of consumption while maintaining equal in revenue compared to the same time in 2022. This trend continued in August 2023, when the firm recorded sales of up to USD 22.4 million, the most in 19 months, and became the company's third-highest revenue month in history.

Sao Ta Food's management anticipates that this favorable trend will continue in the following months. Based on current contracts (through early September 2023), the business anticipates a 10% decline in revenue for the last months of this year compared to the same time in 2022. The company's primary export markets are now the United States, Europe, and Japan, all of which are critical markets for the Vietnamese seafood sector as a whole.

According to the Vietnam Association of Seafood Exporters and Producers (VASEP), Vietnam's seafood exports in September 2023 are expected to be USD 862 million, the same as in the same time in 2022. By the conclusion of the third quarter of 2023, seafood exports had surpassed USD 6.6 billion, a 22% reduction from the same time the previous year.

When compared to the same period last year, certain significant items recovered stability in September. In particular, shrimp and tuna exports in September reached levels comparable to September 2022.

The rebound of pangasius exports is noteworthy, with a 9% increase over the same time previous year. Other product exports, such as squid, octopus, crab, and processed shellfish, were lower than the same period previous year, however the drop varied between 6-12%.

Shrimp exports totaled USD 2.55 billion at the end of September 2023, still 25% lower than in 2022. However, current export figures indicate hints of improvement when compared to previous months. The two largest markets, the United States and China, have begun to raise demand, and shipments to these two economic behemoths have both increased in the previous two months. Some significant CPTPP member countries, including Japan, Australia, and Canada, import shrimp from Vietnam.

According to VASEP, pangasius exports earned over USD 1.4 billion in income by the end of September 2023, a 31% decline from the same time in 2022. Exports of pangasius are progressively resuming in countries such as China, Mexico, Brazil, the Netherlands, the United Kingdom, and the United States. Exports to various markets either recovered balance or surpassed September 2022 levels in September 2023.

Similarly, tuna exports are improving, with September sales matching those of the same time in 2022. However, the steady reduction in the first nine months of the year resulted in a 23% decrease in tuna exports, reaching USD 623 million.

Exports to the top three largest markets, namely the United States, China, and Japan, are expected to surpass USD 1 billion by the end of September 2023. The United States remains the largest market, with about USD 1.2 billion, a 33% reduction from 2022. In the first three quarters, the China-Hong Kong market brought in USD 1.15 billion in foreign currency for Vietnamese seafood, a 15% reduction, while Japan imported seafood from Vietnam worth approximately USD 1.1 billion, a 14% decrease compared to the same time last year.

Seafood exports to the United States, China, and the European Union all recovered in September, increasing by 4-17% compared to September 2022. Exports to Japan saw some volatility in September, remaining 15% lower than in September 2022.

The market is gradually improving, particularly in the fourth quarter. As a result, assuming no substantial changes occur and raw material supplies do not fall precipitously, seafood exports in 2023 might total USD 9.2 - 9.3 billion.

Furthermore, with diminishing inventories and high consumer demand for the year-end holidays, this season presents a chance for increased seafood exports.

The Ministry of Agriculture and Rural Development recommends that businesses continue to leverage Free Trade Agreements, particularly the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Vietnam Free Trade Agreement (EVFTA), to boost exports of key agricultural and seafood products in the coming years. Furthermore, the Ministry will continue to address market difficulties in order to establish advantageous conditions for agricultural and seafood exports, particularly in markets such as China, the United States, and the European Union. To guarantee flexible and successful export market strategies, the Ministry will work with the Ministry of Industry and Trade.