Minh Phu Seafood, Vietnam’s leading shrimp processor and exporter, has reported lower sales to the U.S. this year, though its exports to other markets have risen.
The U.S. currently accounted for around 30 percent of the company’s total export value, down from about 42 percent in previous years, Minh Phu CEO Le Van Quang told SeafoodSource this week.
“This year, Ecuador and India sent massive volumes of their low-priced shrimp to the U.S., pushing prices there to decline. Therefore, the profit we earned from our sales to the U.S. is not as high as other markets,” Quang said.
During the COVID-19 pandemic, demand for smaller sizes from U.S. supermarket chains rose. But there was also an increase in orders from supermarkets in other major markets of Minh Phu, such as the European Union, Japan, Canada, and Australia. As Minh Phu realized it could achieve higher margins in these markets – especially Japan – it shifted its product shipments to them and away from the United States, Quang said.
“Profit in the U.S. market is low as Ecuador, India, and Indonesia have sold shrimp at low prices there. So why do not we focus more on other markets, which also have high demand for our shrimp,” Quang said.
As a result, Japan took over a 30 percent share of Minh Phu’s total export value, from between 22 percent and 23 percent previously. The E.U. and Canada also took on larger roles in Minh Phu’s exports portfolio. Quang said the company plans to keep the share of the U.S. at the current rate, about 30 percent of its total exports, in order to maintain its relationships with its long-term partners in the U.S.
According to Quang, a higher demand for smaller sizes has still led to a shortage of raw material in the local market, as it is not quite profitable for farmers to harvest shrimp at small sizes.
To address the supply issues and meet demand from its customers, Minh Phu will apply multiple harvests to provide the market with more smaller sizes from its two major farms at Loc An in Ba Ria-Vung Tau Province and Kien Giang in Kien Giang Province in 2021, Quang said.
Photo courtesy of Minh Phu
