Vietnamese shrimp exporters switch to new markets

Challenging market environment

The Vietnamese shrimp industry was faced with a challenging market environment over the 2004/2005 period. The growth rate for Vietnamese shrimp exports decreased continuously during 2004 and into the first half of 2005. For the first six months of 2005, Vietnam exported 57,954 tonnes of shrimp, up 2% on 56,789 tonnes exported for the same period in 2004. This modest growth rate compares to 16% between the first half of 2003 and 2004. In terms of value, Vietnamese shrimp exports for the first half 2005 reached US$510 million, compared to US$511 million for the same period in 2004.

Due to serious difficulties in the US market, Vietnamese exporters have shifted to other markets such as Japan (up from 40% of export share in the first half of 2003 to 46% in the same period during 2005), the EU (strong increase from 4% in 2003 to 12% in 2005) whereas exports to the USA are down sharply from 43% in 2003 to 30% in 2004 and to around 20% of exports this year.

The US market

The US shrimp case and bond requirements by the US Customs have affected Vietnamese shrimp exports to the US. According to NMFS, the US imported 14,944 tonnes of shrimp in all product forms from Vietnam during the first six months of this year, down 29% against the same period in 2004. However, an increased quantity of frozen breaded shrimp, 326 tonnes, was imported (up 505% on 2004) whereas imports of other shrimp products into the U.S. from Vietnam fell sharply. This development is linked to the exclusion of breaded shrimp products from US anti-dumping measures.

EU markets

The EU is becoming increasingly important to Vietnamese shrimp exporters. The situation in the US has forced Vietnamese exporters to concentrate more on this large market with strong potential. During the first half of 2005, Vietnamese frozen shrimp exports to the EU amounted to 7,123 tonnes.

The major markets for Vietnamese shrimp in the EU include Belgium which accounts for 24% of exports to the EU, the UK (23%), Germany (17)%, France and Italy (9% each), the Netherlands (7%) and Spain (5%). Other countries together account for around 6% of exports. France is the leading import market of Vietnamese frozen breaded shrimp.

The Japanese market

Japan is still been the biggest market for Vietnamese shrimp. As in the EU, problems with the US have stimulated Vietnamese shrimp exports to Japan. Vietnam is the second largest shrimp supplier to Japan in recent years, behind Indonesia although shrimp imports from Vietnam into Japan overtook those from Indonesia towards the end of 2004. In addition, Japanese import unit prices for Vietnamese shrimp have been above the overall average for Japanese shrimp imports. Unit prices for Vietnamese shrimp were at ¥1,143/ kg in 2004 and at ¥906 in 2005, higher than average unit prices of ¥867/kg for 2004 and ¥891/kg for 2005.

New markets

Faced with an unstable international market situation, Vietnamese exporters have actively explored new markets in addition to the EU and Japan. Since 2004, Vietnamese shrimp exports to markets such as Canada, Australia and Switzerland have increased continuously. In the first half of 2005, Vietnamese shrimp exports to Switzerland increased by 52% compared to the same period in 2004, this figure was 59% between 2004 and 2003. In the same period, Vietnam shrimp exports to Australia increase by 60% in 2004 and 37% in 2005. Canadian shrimp from Vietnam increased by 16%, following a strong boost during the first half 2004 (up 241% on the same period the previous year).

Conclusion

It appears that Vietnamese seafood exporters have responded quickly to changing international market conditions. In the short term, exporters attempted to increase shrimp exports to larger markets such as Japan and key EU countries. Seeking and expanding new markets both inside and outside the EU is a longer term strategy. Trade promotion activities have been stepped up in the EU. Participation in key European seafood exhibitions is likely to remain an important feature of Vietnamese promotional activities during 2005. The event “Vietnamese seafood days” held by VASEP in Brussels (Belgium) in April 2005 and participation in the Conxemar fair in October is within this framework.

In addition, a popular trend among Vietnamese seafood enterprises is to increase the share of value-added products to meet increasing demand in world markets. More and more enterprises add breaded shrimp and other preparations to their product lists.

Vietnam seafood enterprises, in collaboration with VASEP and other relevant organizations, have reinforced controls over the use of chemicals in aquaculture in order to strengthen compliance with increasingly stringent hygiene and health requirements of importing markets.

Truong Tri Vinh
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