Vietnam sees a favorable opportunity for shrimp exports after COVID-19

News 10:10 12/06/2020
(seafood.vasep.com.vn) Among the main export seafood products of Vietnam, while exports of pangasius, tuna, and seafood all dipped, Vietnam's shrimp exports in the first quarter of 2020 were still better with a slight growth in the context of COVID-19 pandemic remains complex worldwide. If the Covid-19 pandemic is resolved by the end of the second quarter of 2020, the world market reopens, Vietnam shrimp can take advantage of opportunities to export after the Covid-19 period.

Positive in the US market

The US ranked the second in Vietnamese shrimp imports, accounting for 18.4% of the total value of Vietnam's shrimp exports. In the first quarter of 2020, Vietnam's shrimp exports to the US market reached US$115.5 million, up 18.2% over the same period in 2019.

The COVID-19 pandemic spread widely in the US starting in March 2020, causing the import of goods including shrimp into this market to be delayed. Import demand also declined due to a sharp decline in consumption in the foodservice segment due to the US Government's disease control measures. However, the retail system still operates normally to meet the shortage of goods because American consumers rushed to buy product for stockpile due to fear of COVID-19. While shrimp supply from India, Ecuador, and Thailand is declining due to its national lockdown, US customers turned to buy Vietnamese shrimp. 

Enterprises exports shrimp to the US should focus on deep-processing and value-added products such as EZ easily peeled shrimp, etc., changing the packaging method to suit the retail segment.

The largest shrimp supplier to the US - India is also a major competitor of Vietnamese shrimp in the US market. The market is facing many difficulties due to COVID-19 pandemic. A lockdown measure to limit the spread of COVID-19 in India, which began on March 23 and lasted until May 18, had negatively affected the country's production as March was the peak month for stocking in the summer season. Shrimp farmers in India have difficulty in supplying and transporting shrimp seeds while the output is suspended, there is no shrimp caregiver because of the lockdown, the price of raw shrimp has dropped deeply. Due to the lockdown measure, some Indian processing plants are only able to operate 50% of the number of workers. Raw shrimp prices in India as of April dropped sharply, affecting the psychology of farmers who are hesitant to stock; raw material supplies in India may decrease.

Ecuadorian shrimp exports to the US are also expected to fall in March 2020 as the country's shrimp industry is operating at only 50% of its capacity in the context of COVID-19 because of the number of infections and deaths toll is still increasing in the country.

Shrimp production in India is heavily affected as the processing companies mainly located in Guayaquil, Guayas province, which is the center of the COVID-19 pandemic in Ecuador. Some companies are at risk of having to close if the disease situation does not improve. Some processing plants do not buy more raw materials because no workers are working at the factories due to lockdown measures.

Raw shrimp prices increased gradually

After a period of decline due to the impact of COVID-19 pandemic, from early April 2020, raw shrimp prices in the Mekong Delta are gradually increasing again. The inching up of shrimp prices opened favorable expectations for new shrimp production.

At the end of April, the price of whiteleg shrimp of 100 head/kg ranged from 95,000 to 100,000 VND, up from 15,000 to 20,000 VND/kg compared with 3 months ago. Black tiger shrimp sized 30 head/kg are priced from 200,000 to 230,000 VND, an increase of 30,000 - 40,000 VND/kg.

The duration of the brackish shrimp season in 2020 is still long, favorable signs are also starting to appear clearly. There is still room for shrimp exports because shrimp is an essential food; the control of pandemic in China, South Korea is better that create more hope for farmers and processing plants when the output is somewhat solved. In the EU market, Vietnam has a favorable advantage from the EVFTA Agreement, which is expected to take effect in July 2020, especially for shrimp products with incentive tax rates that India, Thailand or other countries do not have. However, potential risk factors still exist, so processing, exporting and shrimp farmers still need to work closely to overcome difficulties and seize opportunities when the market recovers.

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