Vietnam's shrimp exports projected to reach 4 billion USD

The Ministry of Agriculture and Rural Development organized the "Online forum to connect the production, processing and export of brackish water shrimp in Vietnam" on the afternoon of July 21. At the event, representatives from Vietnamese commercial counselors and various agencies exchanged valuable information regarding the shrimp market.

According to Mr. Pham Quang Huy, a representative of the Vietnam Trade Office in the US, the US is the largest shrimp consuming market in the world. However, shrimp production in the US currently only meets 10% of its domestic demand. The country has to import eh remaining 90% from around the world, 50 to 60% of which are farmed, brackish water and frozen shrimp. The US imports a significant amount of shrimp from countries in Asia, including India, China, Thailand, Indonesia, and Vietnam, as well as Latin America, including Ecuador, Mexico, and Argentina.

Due to high inflation rates, consumers in the US were forced to scale down on their expenditures. Additionally, large inventories of shrimp and rising interest rates have lessened the incentive to import. As a result, shrimp imports into the US fell significantly in the first half of 2023. However, the US's purchasing power is gradually recovering as a result of the government's effort in controlling interest and inflation rates. The shrimp market in the US is projected to experience significant growth in 2024.

According to Ms. Nguyen Hoang Thuy, a representative of the Vietnam Trade Office in Northern Europe, sustainable seafood is rapidly gaining the favor of Nordic consumers. This consumption trend is being gradually incorporated into EU legal documents. It is expected that the European Green Deal, which is Europe's response to pressing environmental issues, especially the global climate, will encourage the consumption of seafood with an emphasis on organic seafood. Namely, the production of shrimp and other seafood results in lower greenhouse gas emissions.

On the other hand, the Covid-19 pandemic has encouraged the consumption of healthy, sustainable products in Northern European countries. Consequently, organic food, including organic shrimp, will see an increase in export opportunities in the near future.

The increasing use of convenient and ready-to-eat products is another significant factor affecting the market for shrimp in Northern European countries. This is an opportunity for Vietnamese businesses to supply raw shrimp to processing facilities in Northern Europe or to promote deep processing of shrimp products for export to this region.

According to Mr. Tran Van Cong, Agricultural Counselor of Vietnam in Belgium and the EU, Europe is a high-end market that imports an average of 1 to 1.2 million tons of shrimp every year. Consumers in Northwestern European countries prefer to consume value-added products, whereas the main supply of shrimp originates from Asian countries including Vietnam, India, Indonesia, and Thailand. On the other hand, the Southern European region has a more diversified demand and is more inclined to import whole shrimp.

Vietnamese shrimp imported into Europe include vannamei and black tiger shrimp. Vietnamese vannamei in the European market must compete fiercely with products from Ecuador, which has the advantage of large-scale farms, long-standing commercial relationships with Southern Europe and India who has the advantage of affordable prices. Thanks to high processing technology, Vietnam vannamei shrimp has gained access to the premium shrimp market segment in Europe.

Vietnamese black tiger shrimp in the European market only has to compete with products from Bangladesh. Bangladesh black tiger shrimp is primarily sold in the low-end market segment due to the lack of certified products. Conversely, thanks to its higher certified output, Vietnamese black tiger shrimp gained access to the premium shrimp market segment.

In addition to the aforementioned advantages, Vietnamese shrimp has an advantage over its competitors in terms of a free trade agreement with the EU. According to Mr. Cong, the shrimp market in Europe will recover in the near future when inventories decrease and importers boost purchases to prepare for year-end festivals. Consequently, Vietnam's shrimp exports to Europe will also recover.

Regarding major markets in Asia, Mr. Nguyen Duy Kien, a representative of the Asia - Africa Market Department under the Ministry of Industry and Trade, commented that the demand for seafood is increasing in China. Furthermore, shrimp production in China is failing as a result of rising costs, which will motivate China to increase shrimp imports in the near future. Vietnam's shrimp exports to Japan and South Korea also have the opportunity to recover in the second half of the year.

According to Mr. Truong Dinh Hoe, General Secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP), the prices of shrimp dropped worldwide in the first half of 2023. Presently, countries in the southern hemisphere have passed their shrimp harvest season whereas countries in northern hemisphere countries, such as Vietnam and India, are entering theirs. Subsequently, the supply of shrimp in the global market will drop considerably, bringing down the prices as a result.

On the other hand, due to concerns over falling prices, Ecuador exported a significant amount of shrimp in the first half of the year, with the primary target being China. As a result, when Ecuador stops their shrimp harvest during the second half of the year, the country's inventory of shrimp will lower, triggering an increase in global shrimp prices. With the recovery of the global shrimp market, Mr. Hoe anticipates that Vietnam's shrimp exports will see a significant growth in the second half of 2023. Consequently, Vietnam's total export turnover for shrimp may reach approximately 4 billion USD in 2023.