Exporters of breaded shrimp from Vietnam to the United States have benefited from the trade war but they should control the growth of sales to the United States, Ho Quoc Luc, chairman of Fimex (Sao Ta), told a shrimp seminar during the Vietfish 2019 expo, which took place from 29 to 31 August in Ho Chi Minh City.
Breaded shrimp products from Vietnam enjoy zero import tax in the U.S. as they are not subject to any anti-dumping duty.
Breaded shrimp from China, the biggest supplier of breaded shrimp to the U.S., has been under a 25 percent tariff by the U.S. since the start of the ongoing trade spat between the two countries in May, and U.S. President Donald Trump recently moved to increase those tariffs to 35 percent. The high tariffs create a good opportunity for exporters from Vietnam to “have a larger share of breaded shrimp” in the U.S., said Luc.
Citing data from U.S. Department of Agriculture, Vietnam Association of Seafood Exporters and Producers (VASEP) has said Vietnam exported 4,281 metric tons (MT) of breaded shrimp to the U.S. in the first five months of this year, with a total value of USD 30.9 million (EUR 28.2 million) – an increase of 53 percent in volume and 48 percent in value in comparison with the same period last year.
Over the period from January - May, China exported 6,839 MT of breaded shrimp to the U.S., falling 33 percent year-on-year. The exports were worth USD 38.3 million (EUR 35 million), 36 percent lower than the same period in 2018, VASEP said.
Thailand, another competitor of Vietnamese breaded shrimp in the U.S., is not positioned to increase exports to the U.S. due to their high production costs. In the first 5 months of 2019, the average export price of breaded shrimp from Thailand to the U.S. stood at USD 9.2 (EUR 8.4) per kilogram while the rates from China and Vietnam were USD 5.6 (EUR 5.1) per kilogram and USD 7.2 (EUR 6.6) per kilogram, respectively, according to VASEP.
The opportunities for producers of breaded shrimp from Vietnam are clear, but the risks are high. If Vietnamese producers invest massively to build processing plants to increase the country’s output of breaded shrimp to the U.S., and in near future China is successful in negotiating with the U.S. to lower their import tax, that market could shift, said Luc.
Photo courtesy of Fimex (Sao Ta)
