For the first time this year, after continuously growing positive double digits in the previous 5 months, Vietnam shrimp exports in June recorded negative growth. Vietnam’s shrimp export value decreased slightly by 1% to nearly 416 million USD. Accumulating 6 months, Vietnam’s shrimp export reached 2.3 billion USD, an increase of 31% over the same period last year.
The raw material of shrimp is in short supply, demand in major markets such as the US, EU is slowing down are some of the reasons that led to the drop in Vietnam’s shrimp exports in June. The unusual increase in shrimp export turnover in the first months of this year is also attributed to the increase in freight costs, contributing to the increase in selling prices. Besides, the consequences of Covid-19 at the end of 2021 caused many shrimp businesses to reduce processing and speed up repayment of orders at the beginning of this year, and rising inflation also partly affected shrimp consumption prices.
Among the four major markets of Vietnam’s shrimp, exports to the US decreases, export to China does not grow as strongly as before while exporting to Japan and the EU are stable.
The US: The decline in shrimp exports to the US happened for the first time since the beginning of the year in June. Shrimp exports to the US recorded positive growth from the beginning of the year to April. In May, exports started to slow down and fell relatively sharply in June. In June, Vietnam’s shrimp exports to the US reached over $93 million, down 36% compared to the same period last year. Accumulated in the first 6 months of this year, shrimp exports to this market reached nearly 483 million USD, rising 10%.
High inflation affects people’s spending behavior, they will spend more sparingly. Shrimp is also considered a high-grade protein, so people’s demand is somewhat flat
US shrimp imports increased sharply in the first months of the year, so there was still a lot of inventory. Logistical bottlenecks such as high transportation costs, shipping delays and prolonged lack of containers also led to more reticent purchases. In May 2022, US shrimp imports reached 75,484 tons, worth nearly 719 million USD, down 6% in volume but up 6% in value over the same period in 2021. For the first time in 38 months, US shrimp imports decreased compared to the same period of the previous year. However, demand in this market is expected to slightly increase in September to serve the year-end festival season.
Japan: Import demand of this market was quite stable in the first half of 2022. In the first 6 months of the year, Vietnam’s shrimp exports to Japan grew continuously, ranging from 6%-23%. Accumulating 6 months, shrimp exports to this market reached 333 million USD, going up by 15% in comparison to the same period
Freight cost to Japan is not as high as to the US, EU; the inflation rate in Japan is also lower than the inflation rate in the US and EU. These are considered supporting factors for Vietnam’s shrimp exports to Japan.Thus, Vietnam’s shrimp exports to Japan are expected to remain stable from now to the end of the year.
EU: Similar to the Japanese market, shrimp exports to the EU were quite stable in the first 6 months of this year. Shrimp exports to this market in June still maintained a stable growth rate, up 37% to over 74 million USD. Accumulating 6 months, exports to this market reached 378 million USD, up 48% over the same period.
Demand in the EU market recovered after Covid 19, food inflation was high. In spite of difficulties such as high transportation and container costs, Vietnam exporters took advantage of the context by promoting shrimp exports to this market. In this context, the EVFTA is an even more favorable factor supporting shrimp export to the EU.
The growth rate in the second quarter is lower than the first quarter. Vietnam’s shrimp exports to the EU in the coming months will continue to be affected by high inflation, the euro depreciating against USD. The economies of European countries are also dealing with crises from the Russia-Ukraine war. The EU’s shrimp import demand in the following months may slow down and is expected to increase strongly in the last months of the year.
China: After a strong 3-digit increase of 125%-140% from March to May, exports in June increased by 32% to nearly 58 million USD. In the first half of this year, exports to this market reached nearly 333 million USD, up 84%. This market is considered to have good consumption demand from now until the end of the year
China is reopening its trade, many Covid 19 preventing regulations have been loosen. China recently removed the policy of suspending the import of frozen food contaminated with Sars-COV-2 virus after nearly 2 years of implementation. This is also positive news for shrimp suppliers to China, including Vietnam.
Shrimp exports in the last 6 months of the year will not be as prosperous as at the beginning of the year. Enterprises continue to deal with difficulties regarding raw material and remaining challenges from the first half of the year. Nevertheless, the achievement in the first 6 months of the year along with the flexibility of shrimp farmers and the appropriate market strategies of enterprises would be the foundation for the industry to accelerate. Thus, Vietnam’s shrimp export turnover in 2022 is still expected to increase at least 10%, reaching about 4.2 billion USD
Compiled by Thuy Linh