Global inflation begins to cast a shadow over Vietnam’s seafood exports

Vietnam’s seafood exports in the first half of 2022 achieved a record high growth rate of 40%, despite global inflation and geopolitical instability. However, from July 2022, along with the difficulty of raw materials, the shadow of inflation seems to have begun to obscure the overall picture of Vietnam’s seafood exports. Inflation and dollar appreciation are weighing on the seafood consumption in markets, especially large markets such as the US, EU, China, UK…

In the US market, the annual inflation rate up to June 2022 reached 9.1%, a record high from 1981, this rate in July was slightly lower but still high, at 8.5%. After soaring 85% in April, Vietnam’s seafood exports to the US showed signs of slowing down from May and turned to negative growth from June with a decrease of 8% over the same period. In July, seafood exports to the US fell further, down 30.5%.

In which, exports of black tiger shrimp dropped the most by 69%, and whiteleg shrimp decreased by nearly 55%. Pangasius exports to the US in July also decreased by 4%. Crab is also among the top 5 seafood species to be exported to this market, also recorded a drop of 22% in July. However, within the month, there are still many seafood products in the US with high growth such as tuna, which increased by 34%. In addition, herring exports to the US rised nearly 8.5 times over the same period. Herring is the export product with the 7th highest turnover in seafood products to this market. The US also increased 90% of imports of Vietnamese squid in July. Exports of cod and salmon also increased sharply, while exports of other marine fish species almost decreased in July.

Accumulated in the first 7 months of the year, Vietnam’s seafood exports to the US still increased by 30% over the same period, reaching nearly 1.5 billion USD.

Inflation in the eurozone also reached a record high in July 2022 at 8.9% as the conflict between Russia and Ukraine caused energy and food prices to continue to soar. Inflation is blocking the recovery of market demand after the Covid pandemic.

Vietnam’s seafood exports to the EU grew by 31% in Q2/2022, but in July, the growth rate dropped to 18%. Some key products still have higher export value compared to the same period last year, but compared to the previous month, they have decreased remarkably and the growth rate is also lower.

In which, exports of whiteleg shrimp increased by 11%, black tiger shrimp increased by 34%, pangasius increased by 64%, tuna increased by 16%, octopus increased by 45%. There have been some items having  reduced exports to the EU market in July such as clams down 1%, squid 17%, surimi fish cakes down 26%…

Hung Hau Vannamei Shrimp

In addition to the issue of inflation, the depreciation of the euro against the dollar will also affect Vietnam’s seafood exports to this market. By the end of July 2022, total seafood exports to the EU reached 818 million USD, up 37% over the same period.

Similar to the EU countries, the UK market is also reeling in an inflation spiral with a 40-year record high, at the rate of 10.1% as of July. Joining economic sanctions against Russia, the UK also suffered from food price inflation. Vietnam’s seafood exports to the UK in Q2/2022 decreased by 12%, in July continued to decrease by 18%. In which, shrimp exports to the UK decreased by 27%, tuna and other marine fish exports decreased by 54% and 28%, respectively. Price inflation and the lack of cod and pollock from Russia have given more choice to pangasius, which can be used as a substitute for the popular UK product fish & chips. Pangasius exports to the UK still increased by 45% in July. Total seafood exports to the UK by the end of July reached 176 million USD, down nearly 5%.

Vietnam seafood exports to China still increased by 25% in July 2022. However, on the strong growth momentum from the previous months, this is a sign that market demand is slowing down or exports to China still have barriers regarding Covid testing on imported products.

From July, China announced to lift the suspension of shipments found to have traces of the virus. However, this market still does online checking via video and in fact, still has an order to suspend businesses if it is found to not meet China’s standards for coronavirus prevention and control.

Shrimp exports to China in July decreased by 17%, crab exports decreased by 47%. However, pangasius exports still maintained a high growth rate of 54%, octopus exports increased by 140%…With that result, seafood exports to China in the first 7 months of the year brought in over 1 billion USD, up 72%.

Along with difficulties in raw materials, exchange rates, and inflation, Vietnam’s seafood exports in the second half of the year can not maintain high growth as in the first half of the year. However, Vietnam seafood industry are still optimistic about the seafood export figure of over 10 billion USD for 2022, when Vietnam have recoded nearly 6.7 billion USD in the first 7 months of the year.

Compiled by My Hanh