Shrimp exports having a push in 2021

Black tiger shrimp of Anh Khoa Seafood

Export take advantages

2020 is a successful year for the shrimp industry, while overcoming many ups and downs, shrimp export has reached the target with a volume of 411,000 tons, worth 3.73 billion USD, up by 6.72% in volume and 11.07% in value compared to 2019. After a year with many industries fluctuating because of Covid-19, the results achieved by the shrimp industry are very significant.

The Vietnam Association of Seafood Exporters and Producers (VASEP) said: “2020 is a successful year for the shrimp industry since it made use of the advantages of bilateral and multilateral FTAs ​​in major markets to maintain and increase market share in the context of world shrimp import supply and demand strongly influenced by Covid-19 ”.

Over the past year, Covid-19 has made a big change in the trend of shrimp consumption and import in the world. Small and medium sized frozen, canned shrimp products for convenience increased, while the demand for fresh shrimp served in restaurants and restaurants decreased sharply.

In that context, Vietnamese shrimp still went straight to the US, EU, UK, Canada, Australia, Hong Kong, Russia, and Switzerland markets, with the value skyrocketing compared to 2019. Exports to the US alone reached 81,400 tons, worth $866.6 million, up by 29.41% in volume and 32.88% in value.

Shrimp exports to the EU market have recovered after the EVFTA Agreement took effect from August 1, 2020.

The $4.5 billion target is not too far off

In the early days of 2021, the shrimp industry received more good news when the US announced to remove anti-dumping tax on the “big guy” of shrimp, Minh Phu Seafood Corporation.

The decision on 11 February 2021 allows Minh Phu to continue to export frozen shrimp to the US without having to incur additional anti-dumping tax applied to Indian shrimp or any other anti-dumping tax.

Although the seafood trade has not escaped the impact of the pandemic, the shrimp industry is forecasted to continue to grow thanks to the FTA push, especially with the experience of adapting to market changes from 2020.

Mr. Le Van Quang, General Director of Minh Phu Seafood Corporation, said that the enterprise was also refunded the anti-dumping taxes that was temporarily paid earlier.

Minh Phu has exported 55,000 tons of finished shrimp, with a turnover of 580 million USD in 2020. The target in 2021 is 71,000 tons of processed shrimp and a turnover of 790 million USD.

According to VASEP, the shrimp industry has an advantage over the competitors thanks to Vietnam's good control of the Covid-19 epidemic. Importing countries also prefer shrimp from Vietnam.

In addition, the FTAs ​​have many big markets entering the enforcement track, which are being fully utilized by businesses and also widen the way for shrimp for export.

Up to now, Vietnam has signed 16 FTAs, of which 14 have taken effect, the latest FTA is UKVFTA with the UK. In 2021, seafood exporters in general and shrimp industry in particular will take advantage of incentives from the FTAs, especially EVFTA.

According to EVFTA, the import tax on most raw shrimp (fresh, frozen, chilled) to the EU will be reduced from the basic tax rate of 12-20% to 0% as soon as the Agreement comes into effect, the import tax on processed shrimp will return to 0% after 7 years from the date the Agreement.

Thanks to EVFTA, the shrimp industry has a significant competitive advantage compared to other producing countries, one of which is a clear advantage over frozen black tiger shrimp and whiteleg shrimp when tiger shrimp’s GSP tariff of 4.2% is reduced to 0% as soon as the Agreement comes into effect, tax on processed shrimp will gradually decrease to 0% after 5 years.Thailand, which does not get GSP and sign an FTA, has a basic tax rate of 12%, India which has no FTA exept for GSP 4.2% tax, Indonesia with GSP 4.2%, and Ecuador with 12%.

Thong Thuan Company Limited (Thong Thuan Sea Food) said that the EU accounts for 45% of the company's shrimp export market structure. Thong Thuan has taken the opportunity to export shrimp to the EU with 0% tax under EVFTA just a month after this FTA comes into effect. To exploit this market, the company has invested in production in a closed chain from seed to rearing and processing for export. The shrimp processing factories for export of Thong Thuan Co., Ltd fully meet the rigorous requirements for product category, quality standards and production processes of the EU and many other demanding markets.

In 2020, it was estimated that Thong Thuan's shrimp export turnover to EU reached over 45 million USD. This year, shrimp exports to the EU will exceed the results of the previous year.

Both subjective and objective advantages and the proactive transformation of shrimp production and processing enterprises are expected to bring the shrimp industry its export target of over 4 billion USD by 2021 and towards 4.5 billion USD in 2022. The global shrimp market size is forecasted to increase to 64.53 billion USD by 2026 (in 2020 it is at 48.7 billion USD), which is a boost for Vietnamese shrimp export to grow.