Inflation started affecting imports of pangasius in different markets

The nearly 2 billion USD of pangasius exports in the first 9 months of 2022 went beyond the expectations of Vietnam’s seafood industry. However, looking at the export performance in September, we can see that inflation has strongly hit all food and seafood industries, not excluding pangasius.

Although pangasius exports in September were still twice as high as in the same period in 2021, it was the lowest level since the beginning of the year. This trend covers all major import markets.

Inflation and currency devaluation in many import markets have reached a deep stage and have a heavy impact on middle- or low-income consumers, causing them to tighten their spendings. Inflation reduces demand for even moderately priced food items such as pangasius, which used to be affordable for the vast majority of consumers .

Even the Chinese market, which is considered to be the most optimistic destination for pangasius enterprises in the last months of the year showed signs of decrease. Vietnam’s pangasius exports to this market in September was lower than in August, despite recording a high growth  of  190% over the same period last year.

In September 2022, China imported Vietnamese pangasius with a value of $49 million, significantly lower than $64 million in August. The import demand for frozen pangasius fillets and whole pangasius both declined . By the end of the third quarter of 2022, this market accounted for nearly 30% of Vietnam pangasius export value with nearly 590 million USD, up 111% over the same period last year.

In which, export of pangasius fillets accounted for 75% with 441 million USD, the rest was whole pangasius, frozen cut. Although the market’s import demand is still very high and has almost returned to pre-pandemic levels, the depreciation of the Rmb to a 30-year low against the USD also has a strong impact on importers. They are also more cautious when buying from abroad.

The US and EU markets are more difficult when inflation in the US is at the highest level in the past 40 years. The price situation in the US continues to increase strongly, which will lead to the possibility that the US Federal Reserve will continue to sharply increase interest rates to control inflation and further make the dollar fluctuate strongly, affecting global trade.

Vietnam’s pangasius exports to the US in September, although increased by 41%, but still lower than in August. By the end of the third quarter, Vietnam’s pangasius imports to the US reached US$454 million, up 83% over the same period and accounting for 23%. In which, frozen pangasius fillets accounted for 96% with USD 437 million, value added processed pangasius accounted for 2.2% with nearly USD 10 million, the rest was frozen whole pangasius accounting for only 1.6%.

With the EU market, although there are more than two months until Christmas, the price of fish in this market has increased. Some fish that were once cheap, such as hake, are now being sold in fish shops and supermarkets at 30% higher. The reason: rampant inflation, electricity and fuel prices skyrocketed, which directly affected the cost of transporting and storing fish products. The Euro also fell to a 20-year low against the USD, further contributing to reducing the demand for fish in the EU market, including pangasius. Therefore, pangasius exports to the EU in September decreased by 3 million USD compared to August. By the end of September 2022, this market imported Vietnamese pangasius with a value of nearly 160 million USD, double that of the same period in the same period last year.

Due to the Russia-Ukraine conflict, the UK is also struggling with price inflation and soaring energy costs, so the UK economy faces the risk of a prolonged recession. The Pound also fell to its lowest level since 1985. Vietnam’s pangasius exports to the UK in the first 9 months of the year reached nearly 50 million USD, up 30% over the same period, mainly thanks to a strong recovery in the second quarter, but in the third quarter, pangasius imports were lower than in the previous months. Although pangasius exports in the last quarter of the year may not be as positive as in the first months of the year, it is forecasted that pangasius exports in 2022 will still be able to reach about $ 2.5 billion, a remarkable record of the Vietnam’s pangasius industry.

Compiled by Thuy Linh