Vietnamese seafood exports off to a rocky start for 2015
Vietnamese seafood exports off to a rocky start for 2015
Seafood exports for calendar year 2014 grew 16.5% on top of the prior year to US$7.84 billion and have been forecast to continue rising to US$8 billion in 2015, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).
However, VASEP recently announced that shrimp and tra fish exports got off to a rocky start in January on the back of a US Department of Commerce (DOC) decision to impose anti dumping duties on imports late last year.
The ban on imports by the DOC for excessive antibiotics pulled overall seafood exports for January down sharply by 27% on-year to US$425 million, but VASEP fully expects the market decline to be temporary and it to comeback strongly.
Decline in January's seafood exports were just temporary
The US market accounts for 22% of Vietnam’s seafood exports and has historically been the largest global shrimp export market. Apart from the US market, aquatic exports to key markets such as Japan and the EU have also been negatively affected due to a devaluation of the Japanese Yen and European Euro.
Normally, aquatic exports tend to be lower at the beginning of the year and increase towards the end of the year as consumers in western countries prepare for the Christmas and New Year holiday season. However, the normal pattern wasn’t followed in 2014.
Some leading market analysts have speculated that the sharp increase in the early months was the result of consumers consciously making a decision to stock up due to lack of supply sources, but that rationale seems nebulous at best.
It seems more likely that shrimp exports declined because of the US ban and consumers substituted other countries products for Vietnamese seafood or simply did without seafood and replaced it with other meat products.
Regardless, VASEP has said it is confident that once the underlying problems with Vietnamese shrimp and tra fish exports is rectified, exports in the remaining moths of the year will bounce back and more than offset the temporary setback in January.
Last year, Vietnam’s shrimp exports saw positive growth across the board in foreign markets with the exception of the Japanese market due to excessively high levels of oxytetracycline (OTC) which exceeded the allowable level of 0.2 pm, according to VASEP.
The price of shrimp in the world market remained high in recent years which put downward pressure on Japan’s import demand for shrimp. In addition, the devaluation of the Japanese Yen also lowered demand.
The Vietnam Customs office statistics contradict the figures from VASEP as it reports shrimp exports to the Japanese market increased 4.9% in 2014. In either scenario the basic problem that Vietnamese shrimp contained excessive antibiotics and the markets were negatively affected remains unchanged.
Shrimp exports see huge opportunities in the Korean market
VASEP reports that the brightest export market for Vietnamese seafood in 2015 is the Republic of Korea (RoK) market. Economists at VASEP said the Vietnam-RoK Free Trade Agreement (FTA) is expected to be signed early this year which will add fresh impetus to Vietnam’s shrimp exports to the market this year.
Vietnam-RoK FTA negotiations concluded late December 2014 with leaders of both nations having committed to speeding up the process to sign the FTA this year. Accordingly, the RoK would offer preferential tariff reduction and open up opportunities for Vietnam’s agro-aquatic, garment and textile exports.
The RoK was Vietnam’s fifth largest shrimp consumption market after the US, Japan, EU and China in 2014, with shrimp exports to the market tallying in at US$317.8 million. Vietnam surpassed China to become the largest shrimp provider to the market last year.
The RoK consumer tastes for shrimp products dovetailed the Japanese market, which has been an advantage for Vietnamese shrimp exporters.
This year, given Vietnam shrimp exports to the US and Japanese markets have been forecast to encounter difficulties, the signing of a FTA will bring huge benefits to Vietnamese shrimp exports to the RoK market in 2015.
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