Vietnam has suspended exports of pangasius and tuna to Russia due to the impacts of the war that Russia has launched in Ukraine, according to Vietnam Association of Seafood Exporters and Producers (VASEP).
International sanctions imposed on Russia following to its invasion of Ukraine have complicated commerce between the two countries. Several Russian banks were banned from using Society for Worldwide Interbank Financial Telecommunication (SWIFT) payment system, impeding the completion of financial transactions, such as payments for shipments. Some Russian importers have functioning bank accounts in third countries, but those are more time-consuming and also at risk of being blocked, VASEP reported. Additionally, a sharp decline of the value of the Russian ruble has resulted in many Russian importers either being unwilling or unable to pay the full value for cargoes, VASEP said, citing information provided by several major Vietnamese pangasius exporters to Russia.
Further complicating trade between Vietnam and Russia is the fact that international shipping companies have announced they will no longer provide services to Russia.
The suspension of pangasius exports to Russia comes as Vietnamese processors are scrambling to find sufficient materials for processing to serve high demand from other markets.
In 2021, Vietnam reached USD 32.5 million (EUR 29.9 million) in pangasius exports to Russia, up 72.5 percent from 2020, making Vietnam the third-largest supplier of whitefish to Russia after Argentina and China. However, in January 2022, pangasius exports to Russia declined 29.8 percent to USD 2.2 million (EUR 2 million).
Vietnam has also halted exports of tuna products to both Russia and Ukraine, with some cargoes returned due to payment difficulties, VASEP said. As a result, Vietnam’s tuna exports are likely to decline in the coming months, and exporters will have to find new buyers to take in the excess product no longer being sent to the two countries. Russia ranked 13th in the list of top markets for Vietnamese tuna in 2021, with sales of USD 14.3 million (EUR 13.2 million), up 58 percent year-on-year. Vietnam’s tuna shipments to Russia soared 427 percent year-over-year in January 2022. Ukraine ranked 19th on the same list, with Vietnam earning USD 6.8 million (EUR 6.2 million) from its tuna exports to Ukraine in 2021, up 106 percent year-on-year, VASEP said.
Overall, Vietnam exported nearly USD 27 million (EUR 24.8 million) worth of seafood to Russia in the first two months of 2022, up 24 percent year-on-year.
Vietnam’s seafood exports to Ukraine in January and February 2022 totaled USD 4.9 million (EUR 4.5 million), up 11.8 percent from the same period of 2021.
Another big challenge facing Vietnam as a result of the Ukraine crisis is a looming shortage of sunflower oil, which is used in tuna-canning. The escalation of the Ukraine war will lead to further increase in sunflower oil prices and potential shortages, increasing the cost of the tuna-canning process in Vietnam and other countries, VASEP reported.
Photo courtesy of Hien Phung Thu/Shutterstock
