Shrimp exporters benefit from the Covid-19 wave in India – the world’s leading shrimp exporter. India will produce around 650,000-700,000 metric tons of shrimp in 2020, down 30% from 2019. The recent wave of Covid-19 in India has made the situation worse, contrary to many forecasts for production. Shrimp production volume in India will recover in the second half of 2021. Thus, this provides an opportunity for competitors (Ecuador, Indonesia, and Vietnam) to improve their market share in the importing countries -especially in the US.
According to the National Oceanic and Atmospheric Administration (NOAA), India’s warm water raw shrimp exports to the US fell 9% in volume and 10% in value year-on-year in the first quarter. Meanwhile, India’s competitors continued to grow. Ecuador was an immediate beneficiary, with 37% growth in output and 44% growth in value during the quarter. Ecuador has a competitive advantage thanks to the lowest average selling price among the top 5 countries – direct competition with India ( India, Thailand, VietNam, Ecuador, Indonesia)
Vietnam recorded a 41% increase in shrimp exports in volume and a 10% increase in value compared to the first quarter of 2020, with opportunities to expand market share in the US. For raw shrimp, Vietnam’s export price is still quite high compared to competitors (due to the proportion of black tiger shrimp with a higher average selling price). The average selling price for raw whiteleg shrimp is still quite stable (10 USD/kg), the average selling price in the first quarter decreased due to the change in product structure to reduce the proportion of black tiger shrimp with high price. than. The ratio of whiteleg shrimp to black tiger shrimp sales changed from 87/13 in the first quarter of 2020 to 91/9 in the first quarter of 2021. This is because black tiger shrimp is commonly consumed in restaurant and hotel channels that are still partially closed due to the Covid-19 epidemic.
Covid-19 has also changed consumer behavior, in which requirements for processed shrimp have increased significantly. This is always a competitive advantage of Vietnam over Ecuador in the US market and for all competitors in the world market (the EU and Japan prefer processing).
VASEP forecasts that Vietnam’s shrimp exports will continue to increase due to a slight increase in global supply as supplies from many producing countries will decrease due to Covid-19.
However, the profit of most seafood enterprises decreased in the first quarter due to higher raw material prices and higher logistics costs. SSI Research believes that the average selling price may gradually increase by the end of the year, but logistics costs are still high.