According to the Vietnam Association of Seafood Exporters and Producers (VASEP), exports of shrimp, pangasius and tuna fell by 20-26% in November 2022 compared to the same period last year. In particular, the exported squid, octopus and marine fish still recorded positive growth of 9% and 6%, respectively.

BIGGEST GROWTH

In the first 11 months of 2022, pangasius exports still reached nearly US$2.3 billion, up 63%, shrimp exports made over US$4 billion, up 14% compared to the same period in the year 2021. Tuna is the highest-revenue industry with the greatest growth, up 40% to $941 million. Squid and octopus exports also grew strongly by 30% to $704 million.

The US market contributed the largest amount of foreign exchange to Vietnam’s seafood at over US$2 billion, up nearly 10% from the same period in 2021. Seafood exports to China, Hong Kong and the Japanese market rallied a scant turnover of about 1.6 billion USD. The EU market brought in over US$1.2 billion in Vietnamese seafood and over US$882 million in South Korea by the end of November.

The bloc of CPTPP countries (including Japan) accounted for over 26% of total Vietnamese seafood exports at nearly US$2.7 billion in the first 11 months of the year, up 34% from the same period last year.

“In general, reaching over USD 10 billion by the end of November is the result of strong growth in the first three quarters of the year with favorable market demand, increased export prices and sufficient raw materials to deliver orders,” said Ms. Le Hang – Communications Director of VASEP.

However, according to Ms. Hang, export growth slowed in the second half of the year and market demand fell, which is most evident in the export results for the fourth quarter of 2022. In October 2022 in particular, seafood exports increased by only 2% over the same period. In November 2022 14% less than in November 2021.

“Seafood exports are forecast to continue to decline in December and the decline will continue into 2023. Inflation is having a major impact on import markets, causing purchasing demand to be almost stagnant for the first quarter of 2023,” Ms. Le Hang said.

Many seafood companies said orders fell sharply not only for high-priced items such as black tiger shrimp, large white leg shrimp and high-value seafood such as squid, squid, tuna…, but also for products with moderate prices such as small shrimp, Pangasius, small sea fish, fish cakes, surimi… also saw a significant drop in demand for the next quarter.

It will be difficult until the end of Q1/2023

Recognizing the current picture related to the sharp drop in seafood orders, Mr. Truong Dinh Hoe, Secretary-General of VASEP, said the overall message for 2023 is that there are many things to worry about. As the fishing industry is an export industry, given the projected further deterioration in the world economy, the fishing industry is the most directly affected industry.

However, according to Mr. Hoe, the fishing industry is not necessarily pessimistic because the market cannot go down forever, it matters when the market returns. According to statistics from the association, some small businesses are expecting orders to rise again in December this year. However, the group of large companies will not be able to recover until the end of the first quarter of 2023.

According to Mr. Ho Quoc Luc, chairman of the board of Sao Ta Food Joint Stock Company (FIMEX VN), which specializes in shrimp farming and processing for export, the annual amount of imported brood stock is still about 200,000, including imports from the United States accounted for 53.5%; from Thailand is more than 20% and the rest comes from other sources.

Importing breeding cattle has made Vietnam’s export cost about $1 higher than that of Ecuador and India for each of the same size. Therefore, if it comes out of the breeding program in 2022-2030, according to the General Department of Fisheries’ plan, it will increase investment in research into black tiger shrimp and help increase initiative at the disease source – free broodstock to support the domestic production, shrimp exports will have the opportunity to “advance”, dominate the US and EU markets, and assert the Japanese and Korean markets.

“In the countryside, for example, we need to increase the farming success rate before we raise 10 ponds – win 3 ponds, now try to hit 7 ponds. Increasing the farming success rate will reduce product costs and increase our competitiveness,” said Ho Quoc Luc.

Survey results of 117 fish companies in direct and online form show that 71% of companies think the prospect of the fish industry will be difficult in 2023, more than 22% of companies think it will be very difficult, only about 7% of companies are optimistic about the picture of the seafood industry in the coming period.

Three reasons companies are concerned about production and operations between now and 2023 are: exchange rate fluctuations, scarce sources of capital; World economic recession, rising inflation reduce demand, resulting in increased inventories and tougher competition from cheap and low-priced competitors such as Ecuador or India.

When asked “What solutions are companies implementing to reduce costs and increase operational efficiency?”, most of them opted for the use of modern technologies, energy savings and effective inventory management.

At the same time, up to 87% of companies are aware of the problem of investing in sustainable development technologies. However, these companies said they were unable to arrange financing, preventing them from deploying them, and only 13% of them are willing to invest resources immediately.

The fact that many banks are raising lending rates is also worrying fishmongers. Mr. Le Bao Toan, Chief Financial Officer and Chief Accountant of Minh Phu Seafood Joint Stock Company, Hau Giang shared that this year’s loan rate is much higher than last year. In addition, the exchange rate issue also causes obstacles when it keeps increasing, making the exchange rate differential of enterprises in the first 10 months of 2022 also very large.

“Currently, companies have been borrowing money, particularly USD, and the dollar has risen. I have a dollar amount, but the offsetting between the money I borrowed and the money I received causes my money to more or less depreciate,” Toan said.