Seafood exports expected to reach $3b in Q3

Việt Nam's seafood export value is expected to slow growth to US$3 million in the third quarter due to a lack of raw materials and disadvantages in the market in the second half.

At the beginning of the year, farmers released shrimp due to the forecast that the weather would not be too cold. They have expected to early harvest raw shrimp. However, diseases and the quality of shrimp seeds have affected farming results.

According to Hồ Quốc Lực, former chairman of the Việt Nam Association of Seafood Exporters and Producers (VASEP) and also chairman of the Sao Ta Foods Joint Stock Company (FIMEX), there are three reasons for the shortage of raw shrimp, including disease, quality of shrimp varieties and water source.

By the end of this year, the supply of raw shrimp will not be abundant, and prices will remain high, said Lực. This will encourage farmers with the right financial conditions to expand production.

Although output has not increased or increased slightly while the world market prices have not increased, the shrimp export revenue is estimated to surge by 10 per cent over the year.

The higher export value is due to promoting deep-processed products with higher selling price at shrimp processing enterprises. The higher selling price is partly due to a surge in transport costs, said Lực.

Lê Hằng, deputy director of the VASEP.PRO Centre, said that the scarcity of raw materials for shrimp and seafood would continue to affect the export results in the third quarter. The export value in the third quarter would grow slower than in the second and the first quarter to reach about $3 billion, said Hằng.

After a substantial increase of 39-62 per cent in the first four months of this year, the seafood exports showed signs of cooling from May with a growth rate of 34 per cent. In June, it only increased by 18 per cent.

In July, the growth rate of seafood exports continued to slow down to 14 per cent on the year, earning $970 million. It was down 4 per cent compared to June 2022, according to Hằng.

The slowdown in exports from May was due to rain earlier every year, causing diseases in farmed shrimp. This decreased shrimp output, while the shrimp in reserve last year was also exhausted.

Shrimp exports in June decreased by 1 per cent on the year. In July, the exports plunged by nearly 13 per cent to reach $385 million.

In the first seven months, shrimp exports reached $2.65 billion, up 22 per cent over the same period last year.

Domestic shrimp production and world shrimp demand are forecast to not be positive in the second half of the year.

The shrimp supply from producing countries increased sharply in the first half of this year. The import volume of major markets, such as the US and EU, also increased in the first half, leading to an increase in inventories. Therefore, there was a slowdown in demand in the second half.

Meanwhile, domestic shrimp production is facing difficulties due to weather and high costs, so that raw shrimp will be in short supply in the year's second half.

Meanwhile, pangasius exports slowed down in the second quarter of 2022. But in July, pangasius exports surged by 56 per cent to $197 million.

The total pangasius exports in the first seven months of this year reached $1.6 billion, up 79 per cent.

When inflation is too high in many countries and export prices tend to increase, consumers in those countries will tighten their spending and switch to affordable products such as frozen pangasius fillets, fish cakes, and other frozen products, Hằng said.

By the end of July 2022, seafood exports rose by 53 per cent for tuna to $641 million, 31 per cent for squid and octopus to $417 million and 16 per cent for other marine fish products to $1.1 billion.

The higher seafood inventories and inflation affected the US imports from June. This caused the seafood exports to this market to drop by 8 per cent in June and 23 per cent in July.

However, the seafood export to the US in the first seven months reached nearly $1.5 billion, up 31 per cent over the same period last year, Hằng said.

The seafood exports to the EU still maintained a growth rate of 28 per cent in July and 39 per cent in the first seven months, to $829 million, compared to the same period in 2021.

Meanwhile, the seafood export value to China in the first seven months grew by 71 per cent to $1 billion.