On the afternoon of July 21, 2023, the Ministry of Agriculture and Rural Development in Ho Chi Minh City held an “Online Forum on Linking Production, Processing and Export of Brackish Shrimp in Vietnam”.

The market is developing positively

Mr. Le Thanh Hoa, deputy director of the Department of Quality, Processing and Market Development (Ministry of Agriculture and Rural Development), said at the forum that the shrimp industry accounts for about 40-45% of the total seafood export value annually, equivalent to US$3.5-4 billion. Vietnamese shrimp has been exported to about 100 countries and areas, with five main markets including Europe, the United States, Japan, China and Korea.

Vietnam has become the second largest shrimp supplier in the world, with export value accounting for 13-14% of the world’s total shrimp export value. Our country’s shrimp export turnover hit a record US$4.3 billion in 2022, increasing 11.2% compared with 2021.

However, the picture of the shrimp market is very bleak in the first six months of 2023, the shrimp export turnover reached only US$1.5 billion, down 32% compared to the same period last year. Notably, shrimp exports to five main markets (US, EU, Japan, China – Hong Kong and South Korea) simultaneously fell in double digits, with the EU market falling the most at 48.9%, the US at 38.1%, Korea at 28%, Japan at 29%, and China and Hong Kong at 15.7% over the same period in 2022.

“However, the shrimp market has tended to warm up recently. It is forecast that in the final months of 2023, the inflation factor and stocks in the markets will tend to decrease and the demand for the year-end festivals will increase, which will help shrimp exports to increase again,” said Mr. Hoa, saying that the country now has more than 370 specialized and skilled shrimp processing plants with a total shrimp processing capacity per year.

Shrimp processing companies are mainly concentrated in South-Central Provinces and Mekong Delta Provinces. Shrimp products have been processed into a variety of designs and shapes to meet the needs of the consumer market. Many products have a high added value (breaded shrimp, nobashi shrimp, sushi, tempura…) thus satisfying the most demanding market, especially Japan. In addition, companies have used some shrimp by-products to produce high-quality value-added products such as chitin, chitosan, glucosamine, astaxanthin, etc.

Industrial inventories in the US and Europe have declined

Speaking about the US market, Mr. Pham Quang Huy – Agricultural Advisor for the Vietnam Trade Office in the US, said that the country’s domestic shrimp production meets only 10% of consumer demand, with the remaining 90% coming from imports from Central American and South Asian countries. The United States is Vietnam’s largest shrimp export market, mainly white leg shrimp and black tiger shrimp.

For Vietnamese shrimp, export sales to the United States reached more than $200 million in the first five months of 2023, according to US Trade, down 44% over the same period. This decline is due to a number of reasons including inflation and high commodity prices compared to other markets.

When Mr Huy commented on the second half of the year, there were bright spots. In concrete terms, US companies have started to buy goods again with the fall in inventories. In addition, Mr. Huy also highlighted some merits of the US market, such as interest rates have not risen, inflation expectations have fallen and purchasing power has gradually returned.

However, Mr Huy recommended that Vietnamese companies must keep full records of the production and processing process in order to retrieve information and allow for on-site verification by US authorities.

Ms. Hoang Thi Hoang Thuy – trade adviser of Vietnam Trade Office in Sweden, concurrently with Denmark, Finland, Iceland, Norway and Latvia – reported on the trend of shrimp consumption in the Nordic market and said that the Nordic countries are always at the forefront of climate change and environmental protection. Recently, the European Green Agreement featured a “farm-to-fork” strategy that highlights the potential of seafood, including shrimp. As a result, consumers tend to reduce meat consumption, especially red meat, and switch to seafood consumption.

According to Thuy, the EU has introduced new rules to ensure all organic products sold in the EU are of the same standard. So if you want to do business in supermarkets in Northern Europe, companies must have safe and sustainable production certificates, two of which are required: the Marine Stewardship Council (MSC) and the Aquaculture Stewardship Council (ASC) for wild-caught and farmed seafood.

SUSTAINABLE DEVELOPMENT OF THE SHRIMP INDUSTRY

Mr. Ngo The Anh, head of Aquaculture Department (Department of Fisheries, Ministry of Agriculture and Rural Development), said that the shrimp industry has maintained a relatively stable farming area of ​​more than 700,000 hectares over the past five years (2018-2022).

In the first six months of 2023, the brackish shrimp farming area across the country reached 656,000 ha, up 6.4% from the same period last year, of which the area for black tiger shrimp is 605,000 ha and white shrimp is 51,000 ha. The country’s brackish shrimp production reached 467,000 tons, up 4.1% from the same period in 2022.

According to Mr. Ngo The Anh, the shrimp industry is currently facing difficulties and challenges such as climate change and drought – the salinity in the Mekong Delta fluctuates unpredictably, bringing with it the risk of disease outbreaks. The seed source is not active, dependent on imports and natural exploitation, so it is difficult to control the quality.

In addition, the infrastructure of the agricultural area is not guaranteed and production is mostly small and fragmented. The linking of production and export chains is not tight and effective. Monitoring and warning of the agricultural environment is still insufficient. In particular, high production costs, low competitiveness.

To get shrimp exports back on the growth path, Deputy Minister of Agriculture and Rural Development Tran Thanh Nam called on the Ministry of Quality, Processing and Market Development to coordinate closely with agricultural trade advisors in other countries to update market regulations and provide timely information, as well as remove trade barriers to promote exports. Seize and make the most of opportunities to promote exports to markets where Vietnam has signed FTAs.

The Ministry of Agriculture and Rural Development suggested that the Ministry of Industry and Trade should step up negotiations and sign trade agreements to diversify product markets. Helping companies to meet obligations and seize opportunities from agreements; Prioritize trade promotion resources to expand markets and connect trades to boost shrimp exports.

For the sustainable development of shrimp farming and the shrimp industry, it is necessary to further push the development of shrimp farming and other stages in the shrimp production chain toward high technology, said Deputy Minister Tran Thanh Nam. Organization of production towards associative, certified production (VietGAP, GlobalGAP, ASC) in order to improve quality, reduce costs and increase the competitiveness of shrimp products on the world market.

It is necessary to focus on the application of new science and technology to improve productivity, product quality, production efficiency and meet market demand. Development of shrimp farming and stages of banana production towards high technology to reduce direct labor and curb the spread of diseases.