(seafood.vasep.com.vn) According to statistics from Vietnam Customs, Vietnam shrimp exports through November 2015 hit US$2.7 billion, down 25.6% year on year. Estimated figure for the whole year of 2015 was US$3 billion, down 25% year on year. Nevertheless, shrimp still dominated the total exports with 44% of total value for exported seafood.
The increase in Vietnam shrimp exports in 2014 was reversed in 2015. Vietnam shrimp sales in 2015 reported a year-on-year reduce of 25-30%. It was attributable to many factors, including weak demand from major markets, slump in global shrimp price, rise in India’s shrimp production and the sharp depreciation against USD of Indian rupee, Thailand’s baht, Chinese yuan and Indonesian rupiah.
In 2015, Vietnam shrimp was exported to 92 markets. Top 10 markets included the U.S., Japan, EU, China, South Korea, Canada, Australia, Taiwan, ASEAN and Switzerland. These markets made up nearly 95% of total shrimp export value.
Shrimp exports to main markets witnessed sharp declines, the U.S., EU, Japan and China experienced decreases of 35.4%,18%,22.8%, and 17%, respectively. On the other hand, growth was seen in shrimp exports to U.K (+17.3%) and Hong Kong (+3.9%). In the UK, the largest importer of Vietnam shrimp in the EU, there was high demand for warmwater shrimp because coldwater shrimp supply was limited and prices were too high.
Challenges
The ups and downs of market currencies the first factor affecting to Vietnam shrimp exports in 2015. In 2015, many countries devaluated their currencies. The volatility of currencies placed commodity prices under pressure. In the past three years, China has devalued the yuan after the major currencies fell sharply against the US dollar. From Jan 2013 to Aug 2015, EUR depreciated 20%, yen devalued 39%, won downed 11% against USD. In Aug 2015, VND downed 5% against USD. The deepest depreciation against USD was seen in domestic currencies of developing countries such as Brazilian real (-72%), Colombian peso (-52%), Indonesian rupiah (-42%), Malaysian ringgit (-33%), Indian rupee (-20%) and Thai baht (-18%). The depreciation in currencies increased seafood price competition in the global market.
Sharp dive in global shrimp price was regarded as the second factor affecting to Vietnam shrimp exports in 2015. The world economic recession, particularly in major markets and downs in consumption demand caused the decline in price of most agro and fishery products. For example, the price of Vietnam’s black tiger shrimp count 16/20, a U.S. market’s favorite, downed 14% from US$ 11.3 in the early 2015 to US$9.75/lb in QIII/2015. Black tiger shrimp count 21/25 slided 30% from US$ 7.5 /lb to US$ 5.8 /lb while the price of Indian shrimp in the same type also downed from US$ 6.9/lb to US$ 5.85/lb.
Due to higher input costs, Vietnam shrimp price was relatively high.
Last but not least, demand for marine finfish, freshwater finfish became higher.
Opportunities
Vietnam shrimp exports are still open to opportunities, from the decline in antidumping duty, signed Free Trade Agreements (FTAs) and The Trans-Pacific Partnership (TPP).
On 7th September 2015, US Department of Commerce (DOC) issued the final results of the ninth anti-dumping duty administrative reviews (POR9) on frozen shrimp imported from Vietnam. The period of review is from 1st February 2013 to 31st January 2014. DOC imposes average anti-dumping duty of 0.91%, compared to 0.93% in the preliminary results announced in March 2015. This is much lower than final result of POR8, which was 6.37%. This is a good news for Vietnam shrimp exporters. The reduction in antidumping tax helps ease the burden on duty rate imposed on Vietnam shrimp exporters.
The FTAs and TPP offer incentives for seafood exporters by reducing import duty in the partner markets. Accordingly, shrimp exports enjoy benefits after the bilateral FTAs with South Korea, EU, the Eurasian Economic Union (EEU) and TPP have been signed. Import duty of almost raw shrimp is reduced to 0% as soon as these agreements take effect. For value added shrimp products, that roadmap of duty reduction will depend on each market.
Furthermore, the FTAs and TPP helps to expand markets and increase competitiveness for Vietnam shrimp because rival countries have not signed the FTAs with these partners.
The TPP and the FTAs will impact positively on Vietnam shrimp exports in 2016. Despite being affected by downward trend in shrimp price and currency fluctuations, Vietnam shrimp exports are expected to increase by 12% to reach approximately US$ 3.3 billion.
By Kim Thu