Good strategies help promote seafood growth

VASEP Secretary General Truong Dinh Hoe meets Program Manager at CBI Hugo Verhoeven

How will free trade agreements (FTAs) impact on Vietnamese seafood?

Seafood exports recorded constant growth from US$5 billion in 2010 to US$7.8 billion in 2014 with an average increase of 12 percent a year.

Vietnamese seafood has been present in around 170 markets, including key markets of the US, the EU and Japan accounting for more than 60 percent of total export turnover. Total seafood export turnover reached more than US$3 billion in the first half of this year, and the US remained the largest importer with 19 percent of its figure, followed by the EU and Japan with 18 percent and 15 percent.

However seafood export turnover reduced by 16.3 percent in the first half of this year compared to a year ago and the three key markets recorded a decline. According to statistics, Vietnamese shrimp, Tra fish and tuna exports witnessed a fall of 28 percent, 9 percent and 8 percent, respectively. A reason was due to a strong increase in the value of the US dollar against other currencies. In addition, a devaluation of the euro against the US dollar and the Greek debt crisis also saw a reduction in purchasing power in the EU. In particular, Japan’s economic situation remained pessimistic, leading to a cut in import volume.

If Vietnam devises good strategies and makes the most of available advantages such as skilled labor, farming and processing techniques, the country could make the most of opportunities offered by FTAs to expand the value chain, providing a good context for the sustainable development of the seafood production sector.

Could you tell us about the global seafood market?

Vietnamese shrimp, Tra fish and tuna currently account for 75 percent of the sector’s total export value.

Shrimp accounts for the largest proportion. However, Vietnamese shrimp is seeing fierce competition from Thailand, India, Ecuador, Indonesia and China. In the first half of the year, Vietnamese shrimp exports recorded a fall of 28 percent compared to a year ago due to a rapid increase in the world shrimp output and a strong decline in global prices. Shrimp exports are expected to thrive in the last half of the year, but would not see a spectacular breakthrough like in 2014.

Shrimp supplies from the Indian and Ecuadorian markets will reduce because of the influence of the early mortality syndrome. Thai shrimp output this year is expected to be equivalent to 2014, while Chinese shrimp farming areas will be affected by monsoon conditions and the El Nino-Southern Oscillation.

Vietnamese shrimp exports will see positive signs in the last half of the year as a fall in world shrimp output will lead to an increase in prices.

Tra fish farming areas in the Mekong Delta reached an estimated 5,795ha in the first half of the year, a drop of 3.7 percent compared to a year ago for an output of 533,500 tonnes. Export markets remain a key factor leading to a decision of Tra fish breeders. Tra fish face anti-dumping duties in the US market, while exports to Russia are showing signs of recovery. And demand in those markets has remained low, having a negative impact on the processing and trading of Vietnamese businesses.

Vietnam is also seeing competition from the Philippines and Thailand in terms of tuna exports. In the first quarter of this year, tuna exports faced many difficulties such as material shortages and plummeting demand. However, the situation improved in the second quarter.

Statistics show that tuna exports to the US market were on the increase, while the EU market and Japan witnessed a strong fall. According to forecasts, tuna exports to the US would continue thriving in the last half of the year as Thailand is facing accusations of human rights violations on deep-sea fishing boats raised by the Human Rights Watch. The prestige of the Thai fishery sector has been seriously affected and trade relations between Thailand and the US may see challenges.

Statistics also reveal that tuna exports to the EU market reduced by 21.6 percent. The EU is driving towards canned tuna in the bloc instead of using imported items. Therefore, tuna exports to the EU may be difficult to achieve optimistic growth.

What’s the story in terms of the domestic market?

Seafood products produced by VASEP members previously were targeted for export. However, demand for high-quality seafood and processed products have increasingly grown in recent years. Therefore, VASEP members have promoted investment in production for the domestic market. Many seafood products can be found in supermarkets and convenience stores, contributing to meeting consumer demand.

Although revenues from the domestic market remain low compared to exports, the potential for seafood consumption will be huge in the near future.

Ngoc Han