What to do to stop the "plunging" momentum of seafood exports?

Overview of the conference.

Demand in many main markets decreased

At the trade promotion conference with the system of foreign trade agencies in October 2023, on October 31, Deputy Minister of Industry and Trade Do Thang Hai said that fishery is one of the key economic sectors, playing an important role in the development of the Vietnamese economy with an increasingly expanding scale. The Vietnamese seafood brand is not only affirmed domestically but also welcomed by many countries around the world. To date, Vietnamese seafood products have been exported to more than 170 countries and territories, and the seafood export value in 2022 reached 11 billion USD for the first time.

However, from the end of 2022 until now, darkness has cast a shadow over the panorama of Vietnam's seafood exports, as export turnover has continuously decreased due to consumption demand in main markets in a state of "plunging". Seafood exports have declined recently due to pressure from both domestic and international macro factors.

First, export prices of aquatic products at the beginning of this year tended to decrease. Competition in seafood prices in the international market makes it difficult for Vietnamese businesses to find orders, leading to price reductions. Next, the demand for imported seafood also decreased because importing countries had not yet consumed the large inventory of the previous year.

However, some good signals from the world and domestic markets as well as increased consumption trends in main markets in the last months of the year are bringing prospects for export recovery in this industry. The good signal for seafood exports comes from the recovery of key markets due to increased demand during the year-end holidays for the industry's strong products such as tuna, shrimp, and pangasius.

According to the Vietnam Association of Seafood Exporters and Producers (VASEP), in the first 9 months of this year, the country's seafood exports reached 6.6 billion USD, down 22.6% over the same period last year. In particular, exports decreased deeply in the first half of the year by 27%. From June onwards, negative growth gradually narrowed. In September alone, export sales were only 5% lower than in the same period, so the total turnover in the third quarter was only 12% lower than the same period in 2022 and this is also the smallest decrease in 3 quarters this year.

The level of recovery in seafood export sales in the coming time depends largely on two main markets: the US and China. Both of these markets have positive signals in terms of demand. Orders from these two markets are increasing again, but export prices are still lower than in the same period last year.

Mr. Nguyen Hoai Nam, Deputy General Secretary of the Association of Seafood Exporters and Producers (VASEP), said that in recent months, the demand for seafood processing from large enterprises has come from key markets such as Japan and the US increased significantly.

VASEP representative added that the characteristic of seafood processing is very fast capital turnover within just 30 days, the longest being 40 days. Besides, businesses do not have to spend too much on environmental resources to create mature shrimp or fish. The processing segment is currently providing significant support to the seafood industry. When businesses receive processing orders, it means they will have more market share in the future.

Avoid the mindset of buying and selling

At the conference, representatives of Vietnamese trade agencies abroad provided updated information on import and export markets and recommendations for businesses in promoting market development for the seafood industry, in order to effectively carry out the tasks assigned by the Prime Minister, towards the target of seafood export in 2023 reaching 10 billion USD.

The representative of the Vietnam Trade Office in Canada said that every year, Canada has a need to import about 2.8 billion USD from other countries. In 2022, Vietnam will rank 3rd, with a market share of about 7%, after the United States and China. However, with a sharp decline (50.5%), Vietnam is now down to 6th in terms of market share. For processed seafood, Vietnam also recorded a decrease compared to the same period last year (-35.6%), reaching only 48 million USD.

According to the trade representative, some of the reasons explaining the sudden decline in Vietnamese seafood exports to the area are due to high domestic logistics costs in Canada, making Vietnam's export prices less competitive compared to other South American neighboring countries; low CAD exchange rate policy and especially due to the economic recession in Canada. Therefore, to access the Canadian market, businesses and associations should consider participating in the 21st Canadian International Food and Innovation Exhibition (SIAL) to be held in Montreal in mid-May 2024. It is the largest annual trade event in the food industry in North America.

In the Japanese market, the Vietnam Trade Office in this country recommends that businesses need to ensure product quality; ensuring stability in selling prices and supply output because the Japanese market has high standards and is difficult to enter, but once entered, it will be stable and long-lasting.

In particular, Vietnamese export enterprises when doing business with Japanese partners should not just stop at outright buying and selling, but should also continue to monitor and control whether their products are welcomed by the market. How to receive and how customers respond, in order to avoid unnecessary risks, thereby ensuring the reputation of your product brand.