Vietnam sets goal of USD 10.5 billion in seafood exports for 2019
Vietnam is hoping to take in USD 10.5 billion (EUR 9.26 billion) from exports of its seafood products in 2019, up 19.5 percent from last year, according to a statement from Vietnam’s General Department of Fisheries.
The country also plans to achieve seafood output of 8.08 million tons (MT), up 4.2 percent year-on-year, including 4.38 million MT of farmed species – 5.6 percent higher than 2018 – and 3.7 million MT of wild-caught seafood, up 2.6 percent year-on-year.
The new targets were set after Vietnam failed to hit its goal of USD 10 billion (EUR 8.83 billion) in 2018, partly because the export value of shrimp stayed lower than forecasted. The country’s actual seafood exports were worth USD 8.79 billion (EUR 7.75 billion) last year, up 5.8 percent from 2017.
Last year was not a successful one for Vietnam’s shrimp exporters, as the total value from shrimp exports fell 7.8 percent to USD 3.55 billion (EUR 3.13 billion). The drop was attributed to lower demand from the United States, Canada, and high stockpiles in Japan, South Korea and the European Union. The export value Vietnam gained from the E.U. – the biggest destination of Vietnamese shrimp – dropped 2.8 percent year-on-year to USD 838.3 million (EUR 740.8 million) in 2018; while its exports to the U.S. were worth USD 637.7 million (EUR 563.4 million), down 3.3 percent from 2017 Vietnam Association of Seafood Exporters and Producers (VASEP) said in a statement in January.
Shrimp exporters will continue to deal with oversupply and low prices this year. But due to several signed and pending free trade agreements, Vietnam’s shrimp exports are expected to rise to more than USD 4 billion (EUR 3.53 billion) in 2019, up 12.7 percent from 2018. This week, Vietnam began benefitting from the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which took effect on 14 February for Vietnam, eliminating tariffs on its seafood going into other countries that are part of the treaty. The pact already came into force on 30 December, 2018, for Australia, Canada, Japan, Mexico, New Zealand, and Singapore – the first six signatories of the agreement, who ratified the pact last year. The CPTPP also includes Vietnam, Peru, Chile, Brunei, and Malaysia.
Exports to the E.U. are also expected to rise sharply thanks to a pending free trade agreement between Vietnam and E.U., which is likely to be approved this year. The E.U.-Vietnam Free Trade Agreement (EVFTA) was originally expected to go into effect in 2019, but ratification was delayed by European parliamentary elections. Once the deal comes into effect, seafood exporters from the Southeast Asian nation will have “huge opportunities” to speed up exports to the E.U., the Directorate of Fisheries of Vietnam said in a public announcement. About half of the import taxes on seafood products from Vietnam to E.U. will be removed immediately after the agreement comes into effect, with the remainder eliminated within seven years from the effective date of the pact.
Exports to South Korea, a major market for Vietnamese shrimp exporters in Asia, are estimated to reach USD 500 million (EUR 441 million) this year, up 29.5 percent from 2018, VASEP said. And exports to the U.S., which is regarded as a core market for Vietnamese shrimp exporters, are also expected to rise this year
Vietnam’s biggest shrimp company, Minh Phu Seafood Corp., said last month it aims to bring USD 850 million (EUR 748.8 million) from shrimp exports in 2019, up 13.2 percent from last year. In 2018, the company took in USD 750.7 million (EUR 661.3 million) from its exports, up seven percent year-on-year.
In contrast to the decline in shrimp exports last year, Vietnam’s pangasius export value hit an all-time high at USD 2.26 billion (EUR 1.99 billion) in 2018, soaring 26.5 percent from 2017. The U.S. was the top buyer, with the export value of USD 549.4 million (EUR 484.5 million), up 59.5 percent year-on-year. In second was China with USD 528.6 million (EUR 466.2 million) in purchases, up 28.7 percent year-on-year, and in third was the E.U. with USD 243.9 million (EUR 215.1 million), up 20.2 percent year-on-year.
Vinh Hoan, Vietnam’s top pangasius exporter, said in January it exported pangasius worth USD 378 million (EUR 333.4 million) in 2018, up 26 percent year-on-year, as average selling prices last year rose 33 percent from 2017 due to higher raw material prices.
The pangasius industry has set the target of bringing in USD 2.4 billion (EUR 2.1 billion) from exports in 2019 up 6.2 percent from 2018, state media recently reported, citing the General Department of Fisheries. But Vietnamese securities firm BIDV Securities said the industry will have difficulty hitting that goal.
“The pangasius industry will have to deal with risks in 2019 because the export prices were at a historical peak in 2018 and are unlikely to see such increase this year,” the firm wrote in a market note. “We expect the pangasius prices will fall by seven percent in 2019. The growth of pangasius companies this year will come from production expansion, not from higher prices as in 2018.”
Another important fishery in Vietnam also saw a steady rise in its year-over-year valuation in 2018. Vietnam exported tuna worth USD 653 million (EUR 576 million) in 2018, up 10 percent from 2017. Tuna exporters thrived this year as various obstacles, including the origin certification, were eliminated, VASEP said on 24 January.
In its analytical note, BIDV Securities said the U.S.-China trade war and the new free trade agreements will be biggest factors affecting the growth of Vietnam’s seafood sector in 2019.
“We believe [the] trade war will continue to create opportunities for Vietnamese seafood products in their two major markets, the U.S. and China, in 2019,” it said. “At the same time, two major free trade agreements, the CPTPP and EVFTA, will also help Vietnamese seafood because tariffs imposed on shrimp from Vietnam to Japan and E.U. will be reduced sharply.”