Vietnam’s shrimp exporters mull future prospects

06:00 | 05/06/2020 Trade

(VEN)- The Covid-19 pandemic has affected many sectors including Vietnam's shrimp industry, and despite some positive indicators, the prospects of this major Vietnamese export are unclear yet.  

vietnams shrimp exporters mull future prospects

Supply expected to plummet

While most export activities have been interrupted due to the impact of the pandemic, Vietnamese shrimp exports posted revenues of US$628.6 million in the first quarter of this year, a slight increase of 1.8 percent over the same period in 2019. This encouraging result stemmed from the fact that Covid-19 had not yet affected markets in Japan, the US and the Republic of Korea (RoK). Beginning in March, however, shrimp export orders began to slow as the pandemic hit Italy, Spain, Germany and other countries.

According to Gorjan Nikolik, an analyst at Rabobank, the Covid-19 pandemic has affected shrimp farming and trading activities in the world's largest shrimp supplying countries including Ecuador, India, Indonesia, Thailand and Vietnam. As a result, the global supply of shrimp in 2020 is expected to decrease sharply compared to the previous year.

Dr. Ho Quoc Luc, former Chairman of the Vietnam Association of Seafood Exporters and Producers (VASEP), said shrimp production in China and India is expected to decrease about 20 percent and even more if the epidemic lasts through the second quarter.

Shrimp prices

According to Dr. Luc, the shrimp industry is also being affected by harsh weather conditions with a 10-degree (Celsius) temperature gap between day and night that makes the shrimp more susceptible to disease. As a result, farmers hesitate to increase their aquaculture. In the Mekong Delta province of Soc Trang, for example, the largest shrimp-farming center in Vietnam, nearly 25,000ha have been allocated for shrimp farming, but only 15 percent of the area has been utilized for shrimp farming operations.

Breeder shrimp production has also slowed, affecting the domestic price of shrimp. This domino effect will present processing factories with raw materials shortages, and lead to changing shrimp prices.

The demand for shrimp will depend on the Covid-19 pandemic development. Vietnam mainly exports shrimp to the US, the EU, Japan, the RoK and China. Severe economic fallout in these markets could hit Vietnamese exporters hard.

VASEP Deputy General Secretary Truong Dinh Hoe said that if the pandemic is controlled in the second quarter, the demand for shrimp will return to normal and the price will therefore increase again.

Shrimp is in high demand in both export and domestic markets due to its nutritious value. Therefore, Vietnam needs to ensure sufficient supplies of the seafood for the post-crisis period. Businesses need to strengthen processing of instant shrimp products if they are to increase sales.

Nguyen Hanh