Opportunities for Vietnamese seafood in international markets

Although Covid-19 has significantly impacted export and aquaculture activities, Vietnam's seafood exports exceeded $8.9 billion in 2021 (up 5.7 percent compared to 2020). In 2022, free trade agreements, particularly the EVFTA and RCEP, will provide momentum for expanding Vietnam's seafood exports to significant markets.

Vietnamese seafood exports are growing, with several products reporting record increases

The first half of 2022 witnessed the recovery of seafood export products - value reached 5.7 billion USD, up nearly 40% over the same period in 2021. Among Vietnam's seafood exports, pangasius exports had a spectacular development with a turnover of 1.4 billion USD, an increase of 82.4% compared to it in the first 6 months of 2021. The growth of Vietnamese seafood export products is explained by the recovery of the supply chain to major markets like China - HongKong, CPTPP market and interrupted supply of white fish from Russia.

Shrimp is also a significant export product for Vietnam, with an export value of almost 955 million USD in the first quarter of 2022. In particular, the US market remains the top market for Vietnamese shrimp exports with an export value of 195 million USD, followed by the Japanese market (149 million USD).

Ms. Le Hang, Deputy Director of Trade Promotion and Training Center (VASEP.PRO) under the Vietnam Association of Seafood Exporters and Producers (VASEP), predicts that market fluctuations in 2022, such as inflation and conflict in the Russia-Ukraine relationship, will be an opportunity for Vietnamese seafood exporters, especially pangasius products. Pangasius will be selected as an alternative to pollock and cod in some major markets.

Boosting seafood exports to the European Union

According to the VASEP, Vietnam's seafood exports to the EU market has exceed 1 billion USD (up 12 percent) in 2021, with exports to the majority of EU member countries increasing. Notably, shellfish exports to the EU market climbed by 37% in the last year, reaching 87 million USD, owing mostly to clam exports, which increased by 42% to 78 million USD.

Furthermore, following the COVID-19 vaccination campaign and the economic stimulus package commencing in early 2021, demand for seafood in the EU market has recovered significantly. A number of tariff incentives under the EU-Vietnam Free Trade Agreement (EVFTA) also provide an opportunity to promote the export of most Vietnamese seafood products to this market.

Vietnam currently has no competitors in the field of exporting pangasius to the Nordic region, but turnover remains low due to the small market and remote geographical location. As a result, most Nordic nations import from Vietnam via other markets such as the Netherlands, Germany, Belgium, and France.

According to the Vietnam Trade Office in Sweden, businesses must adhere to the market's stringent rules, such as the European Commission's food safety regulation, to expand seafood exports to the Nordic market. Enterprises can refer to information about regulations and mandatory requirements of the Nordic market on official EU websites such as Trade Help Desk and CBI.

The demand for convenience products and ready-to-eat foods is growing in Northern European supermarkets. Food processing companies create these products from raw materials. As more people buy convenience products, processing companies will need to expand their procurement of raw materials.

"This will be an opportunity for exporters if they can provide processors with a standardized and easily processed product or products with greater added value to the market," said Ms. Nguyen Thi Hoang Thuy, Commercial Counselor in Sweden, concurrently Denmark, Norway, Iceland, and Latvia.

Potential of exporting seafood to the RCEP market

The RCEP agreement will open up new opportunities for Vietnamese seafood exporters when exporting to major markets such as Japan, Korea, and China. Policies on market opening, simplifying procedures, and reducing trade barriers will help businesses boost exports to RCEP markets, which currently account for 63 percent of Vietnam's seafood export market share.

China is a significant seafood export market for Vietnam in the RCEP bloc, with an export value of 925 million USD in the first six months of 2022 (up 91 percent over the same period last year). Pangasius (48 percent) and shrimp (35 percent) are the two main seafood products exported to this market.

However, one of the most significant challenges to Vietnam's seafood export industry is the high selling price caused by increasing animal feed costs and high product costs. As a result, domestic seafood enterprises are recommended to reduce product costs, improve quality to satisfy technical criteria, and improve food hygiene and safety in order to safely and sustainably enter the RCEP block market.

Conclusion

In general, thanks to free trade agreements such as EVFTA or RECF, Vietnam's seafood export sector has numerous opportunities to increase exports to worldwide markets. Taking advantage of this opportunity to increase export orders and market share in the US, EU, and Chinese markets are critical solutions for Vietnam's seafood sector to meet the target of a 10 billion USD export value in 2022.

If you are an exporter and need trade consulting, contact Viettonkin for the most up-to-date and reliable information. Viettonkin and our team of specialists have over 12 years of expertise in the sectors of investment and business consulting. Contact us now.