Vietnam’s seafood exports in June were lower than those in the first three months of 2022, which was consistent with the previous warnings issued by local industry insiders, who predicted that the demand for seafood in major global markets would decline due to inflation.
Insiders warned that the industry will face increasing challenges in the coming months.
In June, the export volume of Vietnam south China Sea products was US $1billion, an increase of 18.9%year-on-year, but decreased by 5%month on month, 11%lower than that in April, and 1.3%lower than that in March.
The United States is the largest buyer of Vietnam Nanhai products. In June, the export volume of Vietnam Nanhai products to the United States was 217million US dollars, a year-on-year decrease of 7.6%, and a month on month decrease of 11.7%; The export volume to China was 133.4 million US dollars, an increase of 47.9%year-on-year, but a decrease of 22.1%month on month; Sales to other major markets such as Canada, the Netherlands, the UK and Thailand decreased by 2.4%to 10%month on month.
Japan is one of the only large markets in Vietnam with year-on-year and month on month sales growth in June. The total sales to Japan in that month was $161million, up 26.8%year-on-year and 8.3%month on month.
In the first half of this year, Japan became the largest market for Minfu seafood, Vietnam’s largest shrimp exporter, with sales increasing by 34%year-on-year to US $79.9 million, while the company’s exports to the US market fell by 29%year-on-year to US $54.3 million.
The Vietnam south China Sea Association of exporters and producers (vasep) also said that the high inflation level, China’s restrictive measures aimed at curbing covid-19, the conflict between Russia and Ukraine, labor shortages and the disruption of the U.S. supply chain all affected the sales and consumption of Vietnamese shrimp in the United States.
VO thi Tuong oanh, Vietnam sales director of Siam Canada, said that the decline in sales was a combination of many factors, including insufficient supply caused by weather problems, long-term rainfall affecting Vietnam’s recent shrimp production, and fishermen hesitated to produce because of fuel costs.
Ho Quoc Luc, President of Vietnam shrimp exporter fimex (SAO TA), is less optimistic about the prospects of the shrimp industry in the second half of 2022 than in the first half of this year. He said that due to the extremely low salt content of the river caused by the recent heavy rain, many local fishermen are hesitant to start storing water sources. The spread of shrimp diseases has forced some fishermen to harvest and sell shrimp products smaller than the same period in previous years.
In terms of market, Vietnamese shrimp are facing competition and challenges from India, Ecuador and Indonesia. All shrimp producing countries are actively expanding the U.S. market, making the competition in this market more intense.
VO thi Tuong oanh said that competing countries can provide shrimp products with lower prices. The price difference stems from the increase in production costs in Vietnam, involving packaging, transportation, labor, etc.
Catfish is Vietnam’s second largest export seafood after shrimp, and its overseas sales growth is also slowing. TA ha, a catfish expert at vasep, said that although Vietnam exported catfish worth $1.21 billion in the first five months of 2022, an increase of nearly 90%year-on-year, due to changes in the global market, the outlook for the rest of 2022 is not so strong.
Vietnamese catfish fishermen began stocking in April and may, so a large number of catfish will enter the market in August or September. According to Siam Canadian, in view of the high inventory of catfish in the United States, the market demand for catfish may be moderate in August and September.
Sales of tuna and other wild species fishing in Vietnam are also expected to remain flat or decline. In the first half of 2022, the shipment value of tuna and other wild seafood in the country was US $553million and US $950million respectively, with a year-on-year increase of 56%and 12%respectively. However, vasep experts said that due to the shortage of processing materials, this growth is unlikely to continue in the second half of this year.
Vietnam’s Ministry of agriculture and rural development said that as many as half of Vietnam’s fishing boats were stranded on shore due to rising fuel prices.
Vasep experts said that this may lead to the closure or reduction of production capacity of hundreds of processing plants in the country in the next three to six months, which are completely dependent on the stable domestic supply of seafood.