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October 28, 2020

How Vietnamese Seafood Enterprises are Coping with COVID-19 Challenges

The COVID-19 pandemic has significantly impacted the seafood industry, causing a decrease in export value, delayed payments from customers, and high-interest rates on loans. Domestic seafood enterprises in Vietnam have proposed various financial solutions to help them overcome these difficulties in production and business, according to the Vietnam Association of Fisheries (VASEP). Impact of COVID-19 on Seafood Export Vietnam has experienced a strong reduction in seafood export value in the first two months of this year due to the COVID-19 pandemic. With the disease still spreading across the world, the negative effects on the country’s seafood exports are expected to continue. The prolonged shipping time has led to slow seafood export activities to Asian markets such as China, Japan, and South Korea. Furthermore, strict lockdown measures in many countries have led to a sharp drop in out-of-home consumption of seafood in those markets, especially high-price seafood products. Challenges Faced by Vietnamese Seafood Enterprises Vietnamese seafood enterprises are facing difficulties with production and business, due to a large inventory of seafood products and delayed payments from customers. These challenges have resulted in a great impact on payment for their loans in March, April, and May. At present, many seafood enterprises in Vietnam require loans from banks, but the interest rates on these loans are high. Medium- and long-term loans from large commercial banks have an annual interest rate of 7 percent, and small commercial banks have a rate of 10.5 percent. Vietnamese đồng loans have an interest rate of 6-8.5 percent, and US dollar loans have a rate of 4-4.5 percent. Financial Solutions Proposed by Vietnamese Seafood Enterprises After a meeting with the seafood enterprises, VASEP has collected the financial solutions proposed by them to deal with the existing difficulties. They have suggested that banks should provide loans with suitable interest rates ranging from 3 percent to 6.5 percent for Vietnamese đồng loans and from 1.5 percent to 2.8 percent for US dollar loans. The seafood businesses have also asked the banks to reduce procedures and conditions for lending and disbursement of loans. Additionally, they have requested banks to give them loans to store goods for consumption after the pandemic ends. The seafood enterprises have recommended that banks extend payment deadlines by 2-3 months for debts. They expect free transfers at banks and reductions of 50 percent for transfer fees to other banks. They also hope to enjoy free transfers from foreign banks to their accounts at local banks. Moreover, the businesses have suggested exempting or reducing fees for financial services and business activities, including free services during transactions at banks and fee reductions for services relating to import and export activities. Conclusion The COVID-19 pandemic has created various challenges for Vietnamese seafood enterprises. However, they have proposed several financial solutions to cope with these difficulties, including suitable interest rates, reduced procedures and conditions for lending, extension of payment deadlines, and exemptions or reductions of fees for financial services and business activities. These measures can help the seafood enterprises continue their production and business activities during these challenging times.

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Exploiting the Domestic Market: A Solution for Tuna Exporters During the Pandemic

The COVID-19 pandemic has caused a difficult economic context for many industries around the world, including the tuna industry in Việt Nam. To overcome this challenging time, the Việt Nam Association of Seafood Exporters and Producers (VASEP) has suggested that tuna processors and exporters explore the domestic market. Challenges for Tuna Exporters In case Việt Nam could control the pandemic, but it still exists in Europe and the US, the tuna export market would be difficult and unstable. Tuna is an expensive dish served in restaurants for people with high incomes, but due to COVID-19, many people have lost their income, causing consumption to decrease even when the pandemic is under control. Nguyễn Thị Thu Thanh, director of Sustainable Seafood Limited Company in Khánh Hòa province, stated that the company purchased about VNĐ25-30 billion (US$1.06 million-1.29 million) of raw materials in the past month but only exported about VNĐ2-3 billion monthly. Despite having inventories, businesses still have to pay money to fishermen and interest rates for banks. Additionally, businesses must endure soaring electricity costs due to cold storage, which puts a significant burden on their costs. The Potential of the Domestic Market Nguyễn Thị Thu Sắc, chairwoman of VASEP’s seafood committee, stated that Việt Nam is not only a major seafood exporter but also a potential consumption market for many other countries. The country has a system of restaurants and hotels for international and domestic tourists, a population in the age of high consumption, and increasing income, especially in urban areas, accompanied by the tendency to choose meals outside. All of these factors create a diversified seafood consumption market, which tuna processors and exporters can exploit. Encouraging Domestic Consumption If tuna processors and exporters do not take advantage of the domestic market, consumers may choose seafood imported from other countries. To ensure tuna is consumed, localities with ocean tuna fishing fleets have strengthened the consumption solution, helping the fishing and processing industry overcome the difficulties. For instance, Phú Yên province has encouraged businesses to focus on promoting tuna products and boosting domestic consumption through service and tourism activities. The provincial People’s Committee discourages fishermen from increasing the number of fishing vessels but concentrate on preservation stages to improve the quality of tuna and boost domestic consumption. Furthermore, restaurants, hotels, and large tourist areas of the province have regularly invited culinary experts to perform the demonstration of slaughtering and processing of tuna to serve customers in the past year. These activities have contributed to bringing the provincial tuna specialty to many domestic consumers, improving the value and brand of tuna. Proactive Scenarios for Agricultural and Aquatic Exports To meet the increasing demand of world consumers when the pandemic is over, the Ministry of Agriculture and Rural Development has proposed management agencies and associations proactively develop scenarios of agricultural and aquatic exports. In conclusion, the keyword of this content is tuna, and it discusses the challenges for tuna exporters during the pandemic and the potential of the domestic market. The article also provides solutions to encourage domestic consumption and proactive scenarios for agricultural and aquatic exports.

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Vietnam’s Tra Fish Industry Urged to Improve Quality to Compete with China

The Vietnam Association of Seafood Exporters and Producers (VASEP) has urged the country’s tra fish (pangasius) industry to focus on improving its quality to compete with not only traditional rivals, but also its biggest importer – China. Vietnam’s tra fish sector faces strong competition from countries like India, Indonesia, and Bangladesh, each representing 15-20% of global production. Quality over Quantity Experts suggest that the competitiveness of Vietnamese tra fish should not be assessed solely on quantity, but rather on the quality of the material and products. To address this issue, a 600-hectare high-tech tra fish farm will be developed in the Mekong Delta province of An Giang in the fourth quarter of this year. Once operational, the farm is expected to supply around 200,000 tonnes of high-quality raw materials annually for processing and subsequent export. Opportunities in E-Commerce VASEP Secretary General Trương Đình Hòe believes that once Vietnamese tra fish improves in quality and gains the trust of consumers in demanding markets, it will have more opportunities to be sold well on e-commerce platforms such as Alibaba of China and Amazon of the US. “Through the e-commerce website (Alibaba), Vietnam’s tra fish products will have greater chances to enter this giant market,” he added. Growing Competition The global production of farmed tra fish was estimated at 2.8 million tonnes in 2018, up 6% from the previous year, and about 45% of this total was sourced from Vietnam, mostly in the Mekong Delta, according to the association. As of March 2019, there were 20 tra fish processing factories in China whose production capacity had reached some 30,000 tonnes per year. This indicates that China is likely to become a big rival to Vietnam’s tra fish industry in the near future. Increased Competition from India The Ministry of Agriculture and Rural Development has also warned that Vietnam will face more competition from India, especially in the black tiger shrimp market, where India has been exporting to Japan, one of Vietnam’s traditional export markets for seafood. India has targeted to triple its domestic seafood output with support from the government by promoting the development of projects relating to the production of shrimp varieties. Conclusion Vietnam’s seafood export value in the first three months of 2019 reached $1.8 billion, a year-on-year increase of 0.5%, including $645 million in March. The top four export markets of Vietnamese seafood in the first two months of 2019 were Japan, the US, China, and South Korea, accounting for 52.8% of the total seafood export value. Despite the growth, the purchasing price of tra fish and shrimp has reduced in March due to a drop in export orders of those seafood products. The Vietnamese tra fish industry must focus on improving quality to stay competitive in the global market.

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Vietnamese Tra Fish Exports to be Inspected by US Agency

The US Food and Safety Inspection Service (FSIS) will inspect Vietnamese tra fish imports in early March, according to the Ministry of Agriculture and Rural Development (MARD). The Vietnamese government welcomes the FSIS’s involvement as it ensures that the tra fish from Vietnam meets the strictest safety and quality standards. The approval of the US agency will provide additional proof of excellence for Vietnamese tra fish to enter other markets. Opportunity to Bring Quality of Tra Fish to Higher Standards The MARD’s deputy minister, Phùng Đức Tiến, stated that tra fish met all the US agency’s requirements in production, transport, and processing during its inspections two years ago. Vietnamese businesses consider the upcoming inspections in March as an opportunity to bring the quality of tra fish to higher standards and to enter the US market with zero tariffs. Preparation for Inspections In preparation for the inspections, the National Agro Forestry Fisheries Quality Assurance Department has conducted its own inspections of tra fish farms in the Mekong Delta. Inspectors monitored the quality of water coming in and out of the farms, breeding areas in 10 cities and provinces in the delta, as well as the sanitary protocols for harvest, transport, storage, and processing of tra fish. Vietnamese Firms Make Significant Investments in Quality and Environment In recent years, Vietnamese firms have made significant investments in improving the environment and technologies to ensure that tra fish surpasses the technical barriers of the EU, the US, and Japan. Their efforts seem to have paid off as Vietnamese tra fish has steadily built a reputation for quality in international markets. Expansion of Vietnamese Firms into International Markets According to the Vietnam Association of Seafood Exporters and Producers, the US Department of Commerce has allowed two additional Vietnamese firms – NTSF Fisheries JSC and CASEAMEX – to export tra fish to the US, bringing the total number of Vietnamese firms under the zero tariffs policy to four. Vietnamese firms have been on the lookout for other international markets while continuing to improve the quality and safety of their tra fish.

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Việt Nam’s Seafood Exports Forecast to Decrease Due to Pandemic

Introduction Việt Nam’s seafood exports have been severely impacted by the pandemic, resulting in reduced exports in the coming months. The Việt Nam Association Seafood Exporters and Producers (VASEP) has stated that the seafood processing and exporting industries will continue to face challenges relating to export orders, transportation, and payments. This article will explore the reasons behind the decline in seafood exports and the forecast for the coming months. Reasons for Reduced Seafood Exports The pandemic has negatively impacted the seafood export industry, and the situation is likely to persist in the coming months. Major export markets such as the EU, US, and China are still grappling with the pandemic, which has led to a decrease in demand for seafood products. The reduced demand has resulted in a decrease in export orders, which has affected the transportation and payment of seafood products. These factors have collectively led to a decline in seafood exports in the first four months of this year. Current State of Seafood Exports According to the Ministry of Agriculture and Rural Development, Việt Nam’s seafood export value in the first four months of this year fell by 10 per cent year-on-year to US$2.18 billion. Việt Nam’s two major export seafood products, tra fish and shrimp, suffered the most significant decline, with about 32 per cent to $420 million and 12 per cent to $748 million, respectively. Japan, the US, EU, and mainland China were the major export markets for Vietnamese export seafood products, making up almost 58 per cent of the total export value. Forecast for Seafood Exports VASEP has forecasted that seafood exports in the second quarter would decrease slightly by 5 per cent year-on-year to $2 billion. However, the association expects positive growth in the third and fourth quarters of this year. The department also reported that Việt Nam’s total seafood production reached nearly 2.2 million tonnes in the first four months, up 0.4 per cent compared to the same period last year, including one million tonnes from aquaculture. Conclusion The pandemic has adversely impacted the seafood export industry in Việt Nam. The reduced demand and export orders have led to a decrease in transportation and payment of seafood products. Major export markets such as the EU, US, and China are still strongly affected by the pandemic, which has resulted in a decline in seafood exports in the first four months of this year. However, VASEP has forecasted that seafood exports will see positive growth in the third and fourth quarters of this year. The keyword for this content is “seafood exports.”

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US cuts anti-dumping taxes on Vietnamese catfish products

The US Department of Commerce (DOC) has announced a reduction in anti-dumping duties on tra fish (pangasius) products from Vietnam. The Trade Remedies Authorities of Vietnam under the Ministry of Trade and Industry confirmed that the final anti-dumping taxes on Vietnamese products have been set at US$0.15 per kilogramme, lower than the final results for the previous review period. This article discusses the impact of the DOC’s decision on Vietnamese exporters and the challenges facing the tra fish industry in Vietnam. Anti-dumping Tariffs on Vietnamese Tra Fish Lowered The US Department of Commerce (DOC) has lowered anti-dumping duties on tra fish (pangasius) products from Vietnam. The final anti-dumping taxes on Vietnamese products have been set at US$0.15 per kilogramme, equivalent to 3.8 per cent of the export price. This is a significant reduction from the final results of the previous review period, which saw anti-dumping tariffs set at $1.37 per kilogramme. Vietnamese exporters who were not examined by the DOC will be subject to a tariff of $2.39 per kilogramme, the same as the rate for the previous review period. However, big Vietnamese exporters such as Vĩnh Hoàn JSC and Biển Đông Seafood Company will continue to enjoy a zero tariff rate. Impact of the Decision on Vietnamese Exporters The DOC’s decision to lower anti-dumping duties on Vietnamese tra fish products is a positive development for the industry. Vietnamese tra fish exporters have faced export restrictions imposed by numerous nations in recent years. However, they managed to ship over $2 billion worth of products in 2018 and 2019. The Ministry of Trade and Industry has advised local exporters to continue cooperating with the DOC and providing accurate information to achieve positive final results. The ministry will continue to coordinate with other ministries, sectors, the Vietnam Association of Seafood Exporters and Producers (VASEP), and related export companies to take necessary actions to protect the rights and interests of domestic tra fish businesses. Challenges Facing the Tra Fish Industry in Vietnam The COVID-19 pandemic has had a significant impact on Vietnam’s tra fish exports to many markets. In the first three months of 2021, the export value fell 29.3 per cent year-on-year to $334 million. However, positive signs returned in March from China and the US. During the first quarter, tra fish exports to China reached $63.2 million, accounting for 18.9 per cent of export value of this goods and passing the US market to become the largest market for Vietnamese tra fish. Export value was still 36.4 per cent down compared to the same period last year. Export value to the EU was nearly $36.5 million in Q1, down 36.5 per cent compared to the same period last year. Meanwhile, Vietnam saw a strong drop in tra fish export value to other major markets, such as ASEAN, Brazil, Mexico, Colombia, and Australia. Despite the challenges, tra fish exporters in Vietnam remain optimistic about the industry’s future. The export value is expected to recover in the second quarter with growth of 30-40 per cent year-on-year, according to the association.

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Vietnamese Tra Fish Industry Expected to Grow in 2023

According to Duong Nghia Quoc, chairman of the Vietnam Pangasius Association, the domestic tra fish industry is expected to have a brighter year in 2023. The first quarter of this year saw a rise in exports, and there are good signals for the recovery of pangasius exports to the US market with lower anti-dumping duties. Positive Signs for Export Growth The Food Safety and Inspection Service under the United States Department of Agriculture officially recognized Vietnam’s Pangasius Food Safety Control System in November 2019. China, another key export market, is expected to increase demand for Vietnamese tra fish this year and beyond. Despite the difficulties caused by the coronavirus epidemic, the potential for boosting exports of tra fish to China in the long term is still significant. Competition and the Need for Cooperation Local businesses need to enhance trade promotion, expand markets, and apply technology to improve quality to compete globally. China and other countries, such as India, Thailand, Bangladesh, and Indonesia, have also raised pangasius. The total output of these countries is likely to reach the same level as Vietnam. To tackle this competition, local businesses need to cooperate to develop production chains and avoid competition that would reduce prices. Boosting Domestic Consumption Vietnam’s tra fish industry has a big chance to promote the consumption of pangasius in the domestic market. The domestic market was ignored in the past, but now with a population of 100 million, there is great potential to consume 200,000 tonnes of tra fish every year if each person eats two kilos of tra fish per year. To develop the domestic market, the pangasius industry will need a strong distribution channel. The State should have incentives for local businesses to increase domestic tra fish consumption, and businesses must also boost trade promotion to bring more tra fish products to local customers. Conclusion In 2019, Vietnam gained US$2 billion from tra fish exports, down 11.7% compared to 2018 due to difficulties in exports to traditional markets, like the US, and the plunge in export prices. To maintain the growth of the tra fish industry, local businesses must continue to improve quality, expand markets, and cooperate to develop production chains. They must also promote the consumption of pangasius in the domestic market and increase domestic tra fish consumption.

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The Fisheries Sector in Vietnam: Goals and Challenges for 2020

Vietnam’s fisheries sector has been an important contributor to the country’s economy, with a total output of 8.15 million tonnes in 2019, and an estimated export turnover of $8.6 billion. Despite the current challenges, the sector aims to continue its sustainable growth in 2020. Certification for Aquaculture Products The Director of the Directorate of Fisheries, Trần Đình Luân, stated that in 2020, the focus will be on granting certification to brackish shrimp farms (tiger shrimp and white-leg shrimp), tra fish farms, and aquaculture in cages. The industry will also develop key aquatic products, such as tiger shrimp, white-leg shrimp, and tra fish, along with other high-value aquatic products to increase trade value and sustainable development. Targets for 2020 The Directorate of Fisheries under the Ministry of Agriculture and Rural Development has set targets to achieve a total fisheries output of approximately 8.2 million tonnes in 2020, which is a 0.6% increase year on year. The tra fish output is expected to remain the same at 1.42 million tonnes as in 2019, while the shrimp output is expected to increase by 3.7% to 850,000 tonnes. The sector also aims to gross about US$10 billion from exporting aquatic products, a year-on-year increase of 6.3%. To achieve this goal, Deputy Minister of Agriculture and Rural Development Phùng Đức Tiến stressed that the fisheries sector needs to address some of its shortcomings, such as improving fishing port infrastructure, processing facilities, and logistics services. Challenges for the Industry The industry faces a significant challenge in removing the European Commission (EC)’s “yellow card” warning against illegal, unreported and unregulated (IUU) fishing. Despite these challenges, the domestic fisheries sector has worked out measures to make use of export opportunities. Market Developments and Shrimp Production From early March to September, the prices of brackish shrimp declined due to competitive materials from India and Ecuador and the inventory output from 2018. China’s stricter control of quality and traceability at the border also contributed to the price decrease. However, the directorate has promptly evaluated market developments to orient production and promote supply chains to reduce risks for exported shrimp products. As a result, the breeding area for brackish shrimp in 2019 was estimated at 720,000 hectares, with an output of 750,000 tonnes. The sector will continue to evaluate market developments to ensure its shrimp production remains competitive. Tra Fish Products The directorate has directed localities to carry out measures to maintain growth in tra fish production, and coordinated with relevant agencies to increase inspections on processing and export conditions. The total tra fish farming area in 2019 is estimated to reach 6,600 hectares, up 22.2% against the same period last year. The output is expected to reach 1.42 million tonnes, and the export turnover is hoped to stand at $1.9 billion. Conclusion The Vietnamese fisheries sector is optimistic about its growth prospects in 2020. While it faces some challenges in removing the EC’s “yellow card” warning against IUU fishing, the sector has taken measures to improve the quality and competitiveness of its products. With a focus on certifying aquaculture products, developing key aquatic products, and improving infrastructure, the sector aims to achieve its targets for 2020.

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Seafood Exports to Europe Up 10% Since EVFTA – Positive Signs for Vietnam

The Vietnam Association of Seafood Exporters and Producers (VASEP) reports that the implementation of the EU-Vietnam Free Trade Agreement (EVFTA) at the beginning of August has resulted in a positive impact on seafood exports to Europe. According to VASEP, the number of orders for shrimp and squid in the European market since the beginning of August has increased by about 10% compared to the previous month. Shrimp Exports to EU Tran Van Linh, Chairman of the Board of Directors of Thuan Phuoc Seafood and Trading Corporation, said his company had exported 3,000 tonnes of shrimp and shrimp products to the EU with a value of about 31 million USD, representing an increase of 8% in volume and 6% in value YoY. Nguyen Thi Anh, Director of Ngoc Xuan Seafood Corporation, has also reported that EU customers have begun negotiating orders with the corporation again recently, which is a positive signal for businesses to recover after a long delay and contract cancellation. Growth Prospect for Seafood Exports to the EU Truong Dinh Hoe, Secretary-General of VASEP, noted that the association expected the EVFTA would help seafood exports to the EU grow by about 20%, but in the current pandemic context, an increase of 10% is still encouraging. However, Hoe said the growth rate could not be fully forecast due to the current situation in Europe, which is still facing the pandemic. Yellow Card Issue VASEP also reported that localities are implementing measures to combat illegal fishing and enhancing control and supervision of the installation of monitoring equipment on fishing cruises while imposing strict sanctions for violations of the use of positioning equipment. Advantages of Vietnam Vietnam has advantages in producing and exporting agricultural, forestry, and aquatic products, while the EU has a high demand for these items. The import value of agricultural, forestry, and aquatic products of the EU accounts for 8.4% of the region’s total annual import value. Vietnamese businesses can access a vast seafood consumption market with an average consumption of 22.03 kilograms per person, 5.34 kilograms higher than the world average.

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Seafood Exporters Struggle to Stay Afloat Amid COVID-19 Pandemic

The COVID-19 pandemic has had a significant impact on seafood companies in Vietnam, according to a survey by the Vietnam Association of Seafood Exporters and Producers (VASEP). The seafood companies are experiencing declines in orders of 35-50%, mostly due to cancellations, delays, or shortages of raw materials since the beginning of March. COVID-19 Impact on Seafood Exporters The pandemic is spreading rapidly, and many companies feel that the impact of COVID-19 would become more serious. The exports of tra fish to China stalled since January, and exports to the European Union (EU) markets were facing difficulties in March as the bloc closed its external borders. In mid-March, exports to the Middle East, Asia, and South Africa also started to struggle. As people stay at home to prevent the spread of the pandemic, demand is dropping. The seafood companies are suffering shortages of raw materials, and both producers and exporters are facing high inventories. Seafood Exports Struggle The statistics from the General Department of Customs show that seafood exports totaled more than US$990 million in the first two months of 2020, a drop of 11% against the same period in 2019. Exports to China fell by 44%, EU by 20%, ASEAN markets by 4%, and the Republic of Korea by 9%. Exports of shrimp, the country’s largest export seafood, saw a slight increase of 2.6% to $383 million. It was mainly due to the increase of 16% in exports to Japan while exports to China fell by 37% and to the EU by 15%. Tra fish exports are expected to suffer the most, with a drop of at least 20% in the first quarter of this year, as China was the largest market for Vietnam’s tra fish, accounting for 35%. Tra fish exports to China dropped by 52% in the first two months, and to the EU by 40%. Improving Tra Fish Quality to Promote Exports VASEP urged producers to focus on improving the quality of tra fish to promote exports to the US from next year. Several tra fish companies expect exports to China to recover from next month and return to normal from June.

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