The market is in recession, tuna export businesses are facing significant challenges

Processing and exporting tuna at Binh Dinh Seafood Company. Photo: T.H.

According to Ms. Kim Thu, a tuna market expert from the Vietnam Association of Seafood Exporters and Producers (VASEP), in April 2023, Vietnam's tuna exports remained lower than last year. The export value of tuna this month reached only 67 million USD, a 38% decrease compared to the same period in 2022. As a result, the cumulative export value for the year's first four months showed a 33% decline, reaching nearly 248 million USD.

Specifically, the fishing output of tuna in coastal areas has remained low since the beginning of the year, resulting in a decrease in the supply of raw materials. This has pushed the prices of whole frozen tuna to their peak.

The price of frozen whole yellowfin tuna over 1.8kg in Bangkok, after a slight decrease from 1,750 USD per ton to 1,700 USD per ton, stabilized in February. However, the low fishing output in coastal areas has led to a continuous decline in the arrival of yellowfin tuna at Bangkok port. Consequently, the price of tuna has been steadily increasing.

In May, the price of frozen whole yellowfin tuna over 1.8kg in Bangkok rose to 2,050 USD per ton, an increase of nearly 21% in just three months and an 8% increase compared to last year. This is the highest price in the past five years.

Along with the high prices, the low demand in major markets has led to a decrease in tuna exports to traditional markets in April. However, some new markets have experienced strong growth, such as Israel with a 49% increase, Thailand with a 486% increase, and Russia with a 486% increase.

The US market continues to decline sharply. The economic situation in the US is deteriorating, and consumers are becoming more cautious. American citizens are gradually reducing spending, including on low-value items, and buying fewer non-essential groceries. According to media reports, many large retail chains in the US have recently closed stores in major cities, raising concerns about the future of the retail industry in the country.

This situation has resulted in a 60% decline in Vietnam's tuna exports to the US in April 2023. And for the cumulative four months of the year, tuna exports to this market have decreased by 55%, reaching nearly $90 million. The share of tuna exports to the US, which accounted for 55% in the first four months of 2022, has decreased to 36% in the same period this year.

After a slight 5% increase in March, tuna exports to the EU reversed in April. The export value to this market in April reached nearly 11 million USD, a 28% decrease compared to the same period last year. For the first four months of 2023, tuna export turnover to this market decreased by 9%, reaching over 48 million USD.

Notably, Lithuania emerged as a prominent market in the European Union in April. After a decline in the first two months of the year, tuna exports to Lithuania have continuously grown in the past two months. This has helped Lithuania surpass Italy to become the third-largest tuna market within the EU, following Germany and the Netherlands. Along with Lithuania, tuna exports to Germany also rebounded in April, with a 25% increase compared to the same period.

In the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) member countries, after continuous growth in Vietnam's tuna imports by Japan in the first three months of the year, it decreased by 25% in April.

Meanwhile, tuna exports to Mexico surged by an astonishing 117% and exports to Chile increased by 78% compared to the same period in 2022.

The sluggish export market has created challenges for businesses in terms of finding orders and securing capital to purchase raw materials from fishermen for stockpiling. To retain labor and consume tuna for fishermen, businesses strive to maintain production by increasing processed tuna production while seeking new markets to compensate for the decline in major markets.

However, the sharp decrease in export orders has resulted in a high inventory level. Additionally, increasing input costs are further adding to the challenges, leading most businesses to operate cautiously and in dire need of support from the government.