Shrimp exports to the US face new difficulties

Processing shrimp for export at Sao Ta Joint Stock Company.

Flexibly respond to situation

As of January 15, Vietnamese shrimp exports to the US increased by 4% to US$ 15 million year-on-year. In 2023, shrimp exports to the US decreased by 15% year-on-year to US$ 682 million. After a sharp decrease of 47% in the first quarter of 2023, shrimp exports to the US in the second quarter narrowed the decline, and grew by 15% and 23%, respectively in the third and fourth quarters.

The American Shrimp Processing Association (ASPA), an organization representing and promoting the interests of the domestic, U.S. wild-caught, warm water shrimp processing industry, has submitted an application for imposing anti-dumping duties on frozen shrimp imported from Ecuador and Indonesia, and anti-subsidy duties on shrimp imported from Ecuador, India, Indonesia and Vietnam.

According to shrimp exporters, Vietnamese shrimp exports to the US may be affected in the first half of 2024. In addition, the tension in the Red Sea in the beginning of the year causes the freight to the US increases, which is also an obstacle for the exporters in 2024.

Recently, the Vietnam Association of Seafood Exporters and Producers (VASEP) has sent an Official dispatch to the Prime Minister, the Ministry of Industry and Trade, and the Ministry of Agriculture and Rural Development proposing the support in the US anti-subsidy investigation for the Vietnamese shrimp industry to be able to overcome the investigation stages in the near future.

Deputy Prime Minister Le Minh Khai has requested the Ministry of Industry and Trade to cooperate with relevant agencies to consider and decide on selecting legal consulting service providers to represent and support the Vietnamese Government in the US anti-subsidy investigation for frozen warm water shrimp.

Before initiating the US anti-subsidy investigation against Vietnamese shrimp, exporters need to prepare in all aspects and actively meet the document requirements from the US. The exporters need to research and understand the regulations and procedures for anti-subsidy investigation of the US, closely monitor the developments of the investigation, and coordinate with the Association and the Trade Defense Agency during the case.

Proposing obstacles for enterprises

The breed is a key matter for farmed shrimp. In order to ensure quality production raw materials and reduce production costs, VASEP proposes the Ministry of Agriculture and Rural Development to strengthen quality control of farmed shrimp breeds, ensuring without poor quality breeds providing to the market.

Currently, the cost of shrimp feed only accounts for 30-40% of farming costs. Because the high price of shrimp feed, more than VND30,000/kg, so when the price increases VND 3,000-5,000/kg, it will grow 10-15%. In addition to food costs, electricity costs surges (accounting for 10% of shrimp farming costs, especially for high-tech farming). However, the current electricity price for shrimp farming is calculated based on the electricity service price and at many different prices, so it affects the cost of raw materials. VASEP proposes to impose a fix price for electricity for shrimp farming facilities.

The shrimp industry grasps opportunities, but also faces many challenges, so the industry needs the cooperation of the Government, local authorities, and links throughout the chain. The processing industry need to constantly approach consumer and market trends to provide new products to meet requirements in the timeliest manner.

The farming industry needs to implement production on a larger scale to have a scientific and reasonable overall planning foundation for farming areas... With strong competition from rival producing countries, the industry should focus more on farming to stabilize quality and price, helping to increase the competitiveness of Vietnamese shrimp.