Seafood exports are difficult to recover in the short term

Seafood exports in 5 months or2023 decreased by nearly 30%

Seafood exports have not been able to recover

That is the opinion of Ms Nguyen Thi Thu Sac, Chairwoman of the Association of Seafood Exporters and Producers (VASEP), at the General Meeting of VASEP members on June 12, 2023. According to Ms Thu Sac, 2023 is extremely difficult for seafood exporters; when the world inflation situation worsens, consumer demand decreases markedly, and inventories increase.

In the first 5 months of 2023, Vietnam's seafood exports reached just over USD 3.2 billion, continuing to plummet by nearly 30% compared to 2022 and deeply reduced from 10% to 50% in all major export markets.

The market that dropped the most was the US market by more than 50% over the same period, the EU market by nearly 32%, and China by more than 25%. The main products of Vietnam's seafood export all decreased by double digits. Specifically, shrimp decreased by nearly 36%, pangasius decreased by nearly 40%, and tuna decreased by more than 30%.

Shrimp exports to main markets all decreased from 28 to 50%. The US and EU are the 2 markets with the deepest decline, 44% and 49%, respectively. Exports to China decreased by 25%.

The two main markets of Vietnam's seafood exports, the US and China, had the strongest decline. In the US market, due to the influence of high inflation, and rising interest rates, many banks declared bankruptcy, the country almost fellinto default, etc., greatly impacting the economy's demand and affecting our seafood consumption.

In May, China's manufacturing activity fell to the lowest level since the country ended its Covid-19 zero policy due to weak domestic demand, rising unemployment and a gloomy situation inthe real estate sector.

The decline of the Chinese market has significantly impacted other markets, especially Germany, a major partner of China and the country with the largest economy in Europe. The decline of Germany has brought many difficulties for other countries in the EU region.

Along with the market's difficulties, import prices in all markets decreased over the same period due to large inventories, slow consumption, and importers'lower purchasing prices. Meanwhile, the increase in production costs causes the production cost of export seafood to increase, reducing the competitiveness of Vietnamese seafood products.

From the above difficulties, Ms Sac said, many forecasts suggest that the seafood demand of the markets may continue to decrease in the third quarter of 2023 instead of recovering as previously forecast.

Many solutions to support export

Seafood enterprises said they are making great efforts and actively seeking solutions to overcome the current difficulties, seeking export orders.

Recently, the VASEP Shrimp Committee launched the program "For a sustainable shrimp industry", which has positively impacted the shrimp raw material market. The Freshwater Fish Committee also started to develop a pangasius promotion program along with joint activities to re-evaluate to take measures to improve the supply of fingerlings, feed, and success rate for pangasius. The Fisheries Commission is also making a financial contribution to hiring an international consultant on the IUU Yellow Card issue. These activities show that businesses are going together to go further.

Talking with businesses at the conference, Deputy Minister of Agriculture and Rural Development Phung Duc Tien said that in the context of extremely difficult situations for seafood exporters, assessing the market and strengthening the promotion trade to find export orders is necessary.

Besides, it is necessary to unite businesses in accessing, maintaining, expanding, and diversifying markets, complying with the regulations of Vietnam and import markets. "Enterprises pay attention to investing in technological innovation, apply high technology in processing, and increase the value of export products. Especially in deep processing, the value-added more than 30%,"- Deputy Minister Phung Duc Tien said.

According to businesses, with the current economic, political, inflation, and war fluctuations, it is not easyto make forecasts with a firm basis for the next period. However, seafood still has a certain market demand as an essential commodity. In the post-Covid-19 context and high inflation, there have been many changes in demand trends for seafood products.

Accordingly, high-priced seafood products have continued to experience a decrease in demand in the short term. Affordable items such as dried fish, canned fish, fish sauce, pangasius, and fish cakes may still have a better chance in many markets. However, some markets, such as Japan, Korea, and Australia, still have a more stable demand for value-added processed seafood products inVietnam.

The seafood export situation may be better in the second half of the year; orders will gradually increase to serve the summer and year-end holidays. Whether the seafood export target of USD 10 billion in 2023 has no basis to believe it will be achieved.

However, the seafood industry and businesses need support and companionship to have supply, capital and resources to restore production and export when the market has better signals. If there are favourable conditions for production and the market, seafood enterprises still have the confidence to keep the seafood export target of USD 10 billion this year.