April 14, 2020

Vietnam has emerged as a major player in the global shrimp market and has witnessed an uptick in shrimp exports to Australia. In this article, we will explore the recent growth in Vietnamese shrimp exports to Australia, the key products exported, and the challenges and opportunities for Vietnamese enterprises. Positive growth in shrimp exports to Australia Australia is the seventh-largest shrimp importer of Vietnamese shrimp, accounting for 3.8% of Vietnam’s total shrimp export value to markets. While Vietnamese shrimp exports to Australia fell by 4.4% in 2018, 2019 saw positive growth, with exports recovering after a dip in the first three months of the year. As of December 15, 2019, Vietnamese shrimp exports to Australia reached nearly $121 million, up 12.6% over the same period in 2018. From April 2019 to the end of the year, Vietnamese shrimp exports to this market continued to grow, with the largest increases of 56% in July and 45% in November 2019. Among the top 10 shrimp importers of Vietnam, Australia had the highest growth rate. Top products exported to Australia Vietnam mainly exports PD fresh/frozen whiteleg shrimp, frozen whiteleg shrimp (head off, tail on), whiteleg shrimp (head off, peeled), frozen whole whiteleg shrimp, breaded tempura whiteleg shrimp, among other products to Australia. Despite declining shrimp imports to major markets, shrimp imports to Australia from Vietnam achieved double-digit growth, whereas imports from other suppliers decreased by two digits. In the first 10 months of 2019, shrimp imports of Australia reached $237.4 million, down 16.6% compared to the same period in 2018. Vietnam has maintained its position as the largest shrimp supplier to Australia, accounting for 42% of the country’s total shrimp imports, followed by China with 23% and Thailand with 22%. Opportunities and challenges for Vietnamese enterprises The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) came into effect in early 2019, with Australia as a member country. As committed in CPTPP, all shrimp products exported to Australia will enjoy a 0% tariff rate after the agreement comes into effect. Among seafood products imported from Vietnam, shrimp was the most consumed product in Australia, with an annual consumption of 50-60 thousand MT. For Vietnamese enterprises, this presents an opportunity to boost exports to Australia. However, exporting to Australia has its challenges. The Australian government is advocating for expanding markets to India and ASEAN countries to avoid being affected by the US-China trade war. In addition, Australian consumers have high standards, which are supported by a series of consumer protections in every state in the country. Vietnamese enterprises should focus on boosting trade promotion, building a value chain for shrimp products, and providing new products with high added value, quality, guaranteed origin, and clear labels when exporting to this market. Conclusion Vietnam’s shrimp exports to Australia have been on the rise, and Vietnamese enterprises should focus on building a strong value chain, developing new products, and ensuring compliance with Australian biosafety and food safety regulations. The CPTPP provides an opportunity for Vietnamese enterprises to boost exports to Australia, but they need to overcome the challenges of competition from other countries and meeting high Australian standards. The Vietnamese shrimp industry can benefit greatly from the growing demand for high-quality seafood products in the Australian market.

The European Council has ratified the EU-Vietnam Free Trade Agreement, which is expected to take effect in the summer after ratification by the Vietnamese National Assembly in May. The agreement includes a promise to reduce tariffs on Vietnamese shrimp from 12-20% to zero after seven years. Immediate Cuts in Import Taxes As part of the agreement, Vietnam will immediately reduce import taxes on EU commodities by 65%, with the remainder to be cut over a 10-year period. In contrast, the EU will remove over 70% of Vietnam’s commodities immediately, with the rest to be removed over the next seven years. Signed in 2019 The EU-Vietnam Free Trade Agreement was signed in Hanoi, Vietnam, in June 2019, along with the EU-Vietnam Investment Protection Agreement. Boost to Shrimp Industry Vietnam’s shrimp exports were worth $3.36 billion in 2019, experiencing a decrease of 5.4% YoY. Despite this, the EU-Vietnam Free Trade Agreement is expected to bring significant advantages to the shrimp industry in Vietnam in the coming years. The promise of zero tariffs on Vietnamese shrimp is a significant incentive for European importers to choose Vietnamese shrimp over those of other countries. The agreement provides an opportunity for Vietnamese shrimp to become more competitive and attractive to European customers. Moreover, the immediate cuts in import taxes for EU commodities are expected to increase trade between Vietnam and the EU. This increased trade will enable Vietnam to access the EU’s market more easily and expand its market share. The EU is currently the second-largest market for Vietnam’s shrimp exports, accounting for 18% of the country’s total shrimp exports. With zero tariffs, Vietnamese shrimp exports to the EU are expected to increase significantly in the coming years. Other Advantages of the Agreement In addition to reducing tariffs, the EU-Vietnam Free Trade Agreement offers other advantages to both parties. It removes non-tariff barriers to trade, including technical regulations and standards, and includes provisions for protecting intellectual property rights. The agreement also ensures that Vietnam complies with international labor standards. Furthermore, the agreement offers opportunities for European businesses to invest in Vietnam and access its market. This investment is expected to boost Vietnam’s economic growth and create job opportunities.

The outbreak of the novel coronavirus (COVID-19) has adversely affected several sectors, including the seafood industry in Vietnam. The pandemic has led to cancellations, delays, and raw material shortages, causing most seafood companies to experience a decline of 35-50% in orders, according to a recent survey by the Vietnam Association of Seafood Exporters and Producers (VASEP). In this article, we examine how the pandemic is impacting the seafood industry in Vietnam and what measures companies can take to navigate this challenging period. The impact of COVID-19 on seafood companies Seafood producers and exporters in Vietnam are facing declining demand, causing a build-up of inventories. For example, the survey by VASEP found that 35-50% of shrimp orders to the US and EU were delayed or cancelled, leading to an increase in inventories. Despite this, shrimp exports increased slightly by 2.6% to $383 million, mainly due to the 16% increase in exports to Japan. However, exports to China fell by 37% and to the EU by 15%. Tra fish exports to China are expected to decline by at least 20% in the first quarter of this year due to low demand and interrupted transportation via border gates. China is the largest market for Vietnam’s tra fish, accounting for 35%, and exports to China fell by 52% in the first two months. Similarly, exports to the EU fell by 40%. Vietnam’s seafood industry is still eyeing growth in other markets. VASEP predicts that the EU and the US will increase their demand for Vietnamese canned tuna products by about 15% this year from more than US$719 million last year. Exports to the US alone were worth $316 million, up nearly 38% from 2018. Measures for seafood companies to navigate the COVID-19 crisis The seafood industry in Vietnam needs to focus on adapting to the current market conditions and take measures to remain competitive. Some measures seafood companies can take include: Diversifying markets: Instead of relying on one market, companies should diversify their customer base by tapping into new markets such as Japan, South Korea, and ASEAN countries. Improving quality: Enhancing the quality of products to meet international standards can help companies attract new customers and maintain existing ones. Investing in technology: The use of technology can help improve productivity and reduce production costs. For example, companies can invest in automated processing and packaging equipment. Strengthening supply chains: To ensure a steady supply of raw materials, companies can strengthen their supply chains by working with multiple suppliers and implementing risk management strategies. Supporting employees: Companies need to provide adequate support to employees during this challenging period. This includes implementing measures to ensure the safety of employees, providing training and upskilling opportunities, and offering financial assistance where necessary. Conclusion COVID-19 has had a severe impact on Vietnam’s seafood industry, but there are measures that companies can take to navigate this challenging period. By diversifying markets, improving quality, investing in technology, strengthening supply chains, and supporting employees, companies can remain competitive and emerge stronger in the post-pandemic era.

The COVID-19 pandemic has brought about significant changes in the seafood industry. Amidst the global economic uncertainty, European Union (EU) and United States (US) buyers are stocking up on canned tuna products, leading to an expected boost in Vietnamese canned tuna exports. According to the Vietnam Association Seafood Exporters and Producers (VASEP), the EU and US are predicted to increase their demand for Vietnamese tuna products this year. Forecasted Increase in Tuna Exports VASEP has projected that tuna exports will surge by approximately 15% this year from over US$719 million in 2019. In particular, the value of Vietnamese tuna exports to the US increased by nearly 38% from the previous year, reaching $316 million. The demand for tuna products in the US has been on the rise, especially for canned products, over the years, leading to an increase in the country’s imports. US-China Trade War Moreover, with the ongoing US-China trade war, importers in the US are actively seeking alternative sources of supply, including Vietnam. In 2019, Vietnam remained the second-largest tuna supplier to the US after Thailand. Decline in Vietnamese Tuna Exports to EU However, Vietnam’s tuna exports to the EU declined by 11% to $140 million due to the bloc’s yellow card. The EU issues a yellow card warning to countries that are not effectively dealing with illegal, unreported, and unregulated (IUU) fishing in their waters. The yellow card warning affected Vietnamese tuna exports to the EU. Opportunities for Vietnamese Tuna Producers The rise in demand for canned tuna products in the EU and US, coupled with the ongoing US-China trade war, presents an excellent opportunity for Vietnamese tuna producers to expand their export markets. The increasing demand for canned tuna products is due to the ease of consumption and long shelf life, which has become essential during the COVID-19 pandemic. Vietnamese tuna producers can take advantage of this opportunity by adopting sustainable fishing practices and complying with the IUU fishing regulations set by the EU. This will help to ensure that Vietnamese tuna exports to the EU continue to grow. Additionally, Vietnamese tuna producers can develop new products, diversify their exports, and improve their packaging and labeling to meet the demands of their customers in the EU and US markets. Conclusion In conclusion, Vietnamese canned tuna exports to the EU and US are predicted to increase this year due to the ongoing pandemic and the growing demand for canned tuna products. The Vietnamese tuna industry can capitalize on this opportunity by complying with the IUU fishing regulations set by the EU, adopting sustainable fishing practices, and improving packaging and labeling to meet the demands of their customers in the EU and US markets.