Vietnamese shrimp exports to the US may recover starting from July

The USA holds a dominated position as the largest market for Vietnamese shrimp for many years. Accordingly, the total Vietnamese shrimp exports to this market reached 807 million USD in 2022, which was significantly higher compared to exports to other markets, such as the EU at 691 million USD, Japan at 671 million USD, China and Hong Kong at 664 million USD. Despite remaining as the largest market for Vietnamese shrimp, the value of Vietnamese shrimp exports to the USA in 2022 decreased by 23% compared to that of 2021.

Vietnamese shrimp exports to the USA continued a steady decline in the first half of 2023. High inflation rates in the USA have driven customers to reduce their expenditures and opt for less expensive food options. High inventories in combination with the rising interest rates from the USA have negatively affected its shrimp import demand.

According to the US Department of Agriculture, shrimp imports into this market experienced a downtrend in April 2023, making it the 10^th consecutive month of decline. During the first four months of 2023, US shrimp imports reached 237,377 tons, and valued at 2 billion USD, which is a decrease of 18% in volume and 29% in value over the same period in 2022.

According to the General Department of Vietnam Customs, as of June 15, 2023, Vietnamese shrimp exports to the USA reached 257 million USD, down 41% over the same period in 2022.

The price of Vietnamese shrimp has seen a noticeable decrease recently due to a substantial drop in shrimp exports to the USA as well as the global market. Several shrimp farms in Ba Ria - Vung Tau province reported that shrimp prices in the region have decreased by approximately 30% compared to the previous month.

In addition to the sharp decrease in price, the consumption of farmed shrimp in Ba Ria - Vung Tau faced numerous challenges as a result of the reduced purchases from businesses. Most notably, a major business in Ba Ria - Vung Tau was forced to halt processing shrimp for export due to export difficulties. Moreover, the high production costs have resulted in heavy losses for shrimp businesses in the area.

According to Ms. Kim Thu, a shrimp market expert from the Vietnam Association of Seafood Exporters and Producers (VASEP), shrimp exports to the US are gradually improving from a month-to-month perspective. Namely, Vietnamese shrimp exports to the US reached 23 million USD in January 2023, 34 million USD in February, 47 million USD in March, 55 million USD in April, and 68 million USD in May.

According to recorded data, the amount of Vietnamese shrimp exported to the USA increased for three consecutive months, with each month's volume growing from 2,423 tons in February 2023 to 2,845 tons in March and finally 3,665 tons in April. On the other hand, compared to the overall decline in US shrimp imports, monthly Vietnamese shrimp exports to the US only saw a small decrease.

Several Vietnamese shrimp products exported to the USA in April 2023 recorded a strong growth compared to March 2023 including shell-on shrimp with an increase of 211%, peeled raw shrimp with an increase of 46%, cooked and breaded shrimp with an increase of 13% and 20% respectively.

According to Ms. Kim Thu's projection, the volume of Vietnamese shrimp imported into the US will continue its growth until June. Subsequently, Vietnamese shrimp exports to the US may begin its recovery starting from this July.

The global market has shown multiple encouraging signs that support Vietnamese shrimp exports to the USA. Namely, cold storage in the USA is gradually running out of shrimp inventory. US importers, retailers and wholesalers will naturally consider increasing their imports. As a result, shrimp prices will rise after falling too low. Shrimp consumption for year-end festivals in the USA is also projected to increase. In terms of logistics, the supply of ships and containers is ready to support exporters from around the world.

According to data collected by VASEP, India has suspended farming operation on 30 to 50% of its ponds. On the other hand, EI Nino has damaged 30% of Ecuador's shrimp farming areas, leading to a decrease in shrimp production. Due to these factors, the outlook for Vietnamese shrimp exports to the USA in the second half of 2023 is favorable.