The bad news and good news about seafood exports to China

09:00 | 17/03/2020 Trade

(VEN) - China was not only Vietnam’s largest Tra fish export market in 2019, but also the fourth largest importer of Vietnamese shrimp. However, the novel coronavirus (Covid-19) outbreak is strongly affecting Vietnam’s fishery exports to this market.

the bad news and good news about seafood exports to china
China was Vietnam’s largest Tra fish export market in 2019

Exports badly affected

In 2019, China was Vietnam’s largest Tra fish export market with a total value of US$622.7 million, a year on year increase of 28.8 percent, accounting for 31 percent of total Tra fish export value. With stable growth, good prices, and diverse market segments, many Vietnamese Tra fish processing enterprises still consider China a strong potential market in 2020. However, after the outbreak and spread of the Covid-19 epidemic, many fast food chains and restaurants were temporarily closed in China, and wholesale markets in border areas also suspended operations, affecting seafood exports to this market.

In 2019, China was also the fastest growing market among Vietnam’s top six shrimp markets. However, in the first quarter of 2020, shrimp exports to China are expected to decrease due to the impact of the Covid-19 epidemic. According to a representative of a shrimp export business that signed a contract to export more than 600 tonnes of shrimp to a Chinese customer, it was only able to deliver half the goods before Tet. The remainder, hundreds of tonnes of shrimp, is currently in cold storage.

According to the Vietnam Association of Seafood Exporters and Producers (VASEP), seafood exports through border gates now account for 20 percent of the total seafood export value to China, meaning that closure of the gates could reduce at least 20 percent of Vietnam’s seafood export turnover to China in the first three months. Exports in the form of goods exchanges between residents in border areas and via official channels through Vietnam’s international and main border gates are also facing difficulties.

Opportunities to expand market share

However, the VASEP has found a bright light at the end of the Covid-19 tunnel, saying that once the epidemic is controlled, Chinese consumers will likely change their perceptions and eating habits, limiting intake of raw food and consuming more processed shrimp products that provide effective control of food safety and hygiene.

Regarding the Tra fish industry, VASEP said the Covid-19 impact is also an opportunity for businesses to promote domestic sales and distribution channels. According to some Tra fish export enterprises, once the epidemic is under control, China’s import demand for Vietnamese frozen Tra fish products will increase sharply following a lengthy trade suspension. Accordingly, Vietnamese enterprises need to monitor market developments to adjust their production and export plans appropriately, seek new export markets, and develop domestic distribution channels.

According to VASEP’s forecasts, if the Covid-19 epidemic is brought under control in the first quarter, total seafood export revenue to China in 2020 may reach US$1.5 billion, a slight increase of five percent compared to 2019. But if it continues until August, the annual export revenue will reach about US$1.33 billion, a year on year drop of six percent.

Nguyen Hanh