Seafood companies expect higher revenue on brighter prospects

Large seafood enterprises have set higher revenue and profit targets this year thanks to positive growth prospects of the seafood export market, especially the US and EU.

Rising demand

According to the Viet Nam Association of Seafood Exporters and Producers (VASEP), seafood exports have rebounded with the figure for the first five months of 2021 reaching US$3.27 billion, up 14 per cent over the same period last year.

Shrimp exports in May totalled $375 million, up 25 per cent year-on-year, while that in the first five months reached $1.34 billion, up 14 per cent. Similarly, pangasius brought in $134 million in May, up 26 per cent and that for five months reached $623 million, up 12 per cent. Other seafood products such as tuna, squid and octopus also witnessed growth.

Vietnamese seafood has the opportunity to increase its market share in the US market as India is heavily affected by the COVID-19 pandemic and Chinese enterprises reduce exports due to the US-China trade war.

Vietnamese shrimp is currently in the most consumed among Viet Nam’s seafood export products to US market, accounting for 21 per cent of seafood exports. The US opened 50 states from May 20 after a long lockdown due to COVID-19, which was a factor promoting imports.

Pangasius exports to the US are also on the rise in the first five months of 2021, reaching $135 million, an increase of 57 per cent compared to the same period last year.

As for tuna, the US is now the largest import markets of Viet Nam’s tuna, accounting for 42 per cent of the proportion.

Besides the US market, businesses expect the EU to be the growth engine this year as the demand for shrimp and seafood products increases in the context of the COVID-19 pandemic being gradually controlled. EU importers are now more interested in Vietnamese seafood suppliers thanks to tariff cuts from the EU-Vietnam Free Trade Agreement and stable source of raw materials. By the end of May 2021, Viet Nam’s seafood exports to the EU reached $380 million, up 15 per cent, in which shrimp accounted for nearly $199 million, an increase of 22 per cent over the same period last year.

Overcome challenges

According to MPC, in the first quarter of 2021, due to the impact of the COVID-19 pandemic, the prices of some raw materials, inputs and essential services for production and business all increased, especially cargo ship fees rising over 30 per cent over the same period in 2020, affecting the company’s profit, down 56 per cent.

The first quarter has not yet entered the shrimp harvest season, thus the supply is scarce, causing the price of raw shrimp to increase, leading to the rise of costs.

At VHC, increased costs caused the profit in the first quarter of 2021 to decrease by more than 13 per cent compared to the same period last year, to VND131 billion. Selling expenses rose mainly due to increased freight costs.

ACB Securities Company said that the inventory of raw pangasius in Viet Nam is decreasing, while the demand for fish in the world recovers, so the price of raw pangasius may increase.

According to CSI Securities, seafood exporters are still facing challenges from high sea transportation costs due to a shortage of containers, which hinders exports to the US and EU. Meanwhile, some markets have adopted non-tariff barriers to limit and tighten controls on imported goods. — VNS