Shrimp exports in June 2023: China recorded the first positive growth milestone

In the first 6 months of 2023, Vietnam’s shrimp exports reached 1.5 billion USD, down 32% over the same period. Market demand, raw shrimp prices and export prices all went down, inflation increased, and strong competition with other suppliers made Vietnam’s shrimp exports difficult in the first half of 2023. Shrimp farmers and businesses are still expecting more positive signals for shrimp production and export activities in the second half of this year.

In June 2023, shrimp exports reached 328 million USD, down 21% compared to the same period in 2022. The decrease of 21% in June was lower than the decrease in previous months (March, April and May recorded a decrease of 28-35%).

Regarding the consumption market, in June 2023, shrimp exports to main markets such as the US, Japan, EU, and South Korea continued to decrease by double digits. Notably, exports to China & HK market recorded positive growth for the first time since the beginning of this year. In this June, exports to a number of smaller markets like Australia recorded positive growth of 9%; positive double-digit growth is also seen in exports to the UK (up 23%), Taiwan (up 20%), Switzerland (up 86%).

The EU market in the first 6 months of 2023 imported 193 million USD of shrimp from Vietnam, down 49% over the same period. From March to June, Vietnam’s shrimp exports to the EU recorded a significant decrease of over 40% (down from 41%-56%).

The Russia-Ukraine war, thrifty consumer spending, rising prices of goods, rising gasoline, and depreciation of the Euro are the reasons for slow demand in this market. People choose cheap food, smaller size of shrimp, importers limit their purchases, selling the inventory to limit losses.

In the EU market, Vietnamese shrimp competes strongly with Ecuador. Ecuador has  an abundant supply of raw materials of shrimp with cheap prices. Therefore, its shrimp processed products dominate the EU market in the middle and high market segments. In this market, Vietnamese shrimp only retains the advantage in the high-end segment.

In the first 6 months of 2023, Japan imported 236 million USD of shrimp from Vietnam, down 29% over the same period.  Vietnam’s shrimp exports to Japan in June 2023 decreased by 35% – the deepest decrease since March.

In the Japanese market, Vietnamese shrimp also have to compete “fiercely” with Indian and Ecuadorian shrimp. According to data from the World Trade Center (ITC), in the first 4 months of this year, Japan tended to increase imports of shrimp from India and Ecuador, an increase of  44% and 49% respectively while reducing imports from Vietnam. Data from the Indian Ministry of Commerce shows that, in the first 5 months of 2023, Japan sharply increased imports of black tiger shrimp from India.

Vietnam’s shrimp exports to Japan in the first months of this year still faced difficulties due to the sharp depreciation of the Yen. By early July 2023, the Yen had fallen too sharply, above 145 Yen/USD, making it difficult to consume shrimp in this market because the selling price had to fall in line with the Yen’s decline.

In the first 6 months of this year, Vietnam’s shrimp exports to South Korea reached 166 million USD, down 28% over the same period. In June 2023, Vietnam’s shrimp exports to South Korea decreased by 21% over the same period last year.

High inflation, currency devaluation, rising interest rates, consumers tightening  spendings, and large inventory are the reasons why shrimp exports to this market decrease. In the first half of this year, the value of shrimp exported to Korea did not fluctuate as much as other markets (the US, China ..)

According to ITC, in the first 5 months of this year, South Korea’s shrimp imports reached over 313 million USD, down 19% over the same period. Vietnam is still the largest supplier, followed by China and Canada. India ranks 8th in shrimp supply to Korea. In the first 5 months of this year, Korea’s shrimp imports from India increased sharply by 143%.

Korea strongly increased imports of Shrimps and prawns, prepared or preserved, in airtight containers (HS code 160529) in the first 5 months of this year with an increase of 1,780% to 959 thousand USD.

The US and Chinese markets: Throughout the first half of this year, both markets experienced similar trends, with the export turnover of the following month being higher than the previous month and  the rate of decrease in turnover also lessened with each passing month. Therefore, these two markets are now being seen as promising prospects for shrimp exports in the second half of the year.

Vietnam’s shrimp exports to the US in the first 6 months of this year reached 299 million USD, down 38%. In June this year, shrimp exports to the US decreased by 23%, the lowest decrease since the beginning of the year. The value of Vietnamese shrimp exports to the US in June reached more than 71 million USD, the highest value since the beginning of this year.  The shrimp price in the US is expected to reach the bottom and the shrimp consumption is forecasted to increase during year-end season.

According to data from the US National Oceanic and Atmospheric Administration (NOAA), in the first 5 months of 2023, the US imported 299,724 tons of shrimp worth 2.5 billion USD, down 18% in volume and 29% in value over the same period in 2022. The downward trend in imports is expected to continue for at least the next 3 months. The average import price in May was 8.39 USD/kg, 12% lower than the same period but 2% higher than the average price in April.

The US imports shrimp from 35 different countries, of which India, Ecuador and Indonesia are still the main shrimp suppliers. Generally, import of shrimp from source declined. However, there are 6 countries that the US still increase imports including Saudi Arabia (up 20% in volume), Honduras (up 37%), Spain (up 33%), New Caledonia (up 100%) and Nigeria (up 4,325%), Mexico (up 11%).

Vietnam’s shrimp exports to China in the first half of this year reached 239 million USD, down 19% over the same period. June is the first month since the beginning of this year, shrimp exports to China recorded an increase over the same period last year, up 19% to 59 million USD. The rate of decline has been gradually decreasing over months.

According to data from China Customs, the country’s shrimp imports in May increased sharply by 77% year-on-year to 100,310 tons. Import value increased 55% to 579 million USD. Generally in the past 5 months, shrimp imports increased by 48% to 415,305 tons; export turnover also increased 28% to 2.3 billion USD.

Vietnam’s shrimp exports have not fully recovered since July compared to the same period last year. However, the decline rate is expected to gradually narrow. Convincing shrimp farmers to continue stocking is crucial in the current challenging context of the shrimp industry. This requires time, cooperation across the industry chain, and support from state management, as suggested by Dr. Ho Quoc Luc, Former Chairman of VASEP and Chairman of the Board of Directors of FIMEX VN.

(Source: https://seafood.vasep.com.vn/)

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