Reports in Vietnam expect the strong outlook for US demand to offset market turmoil stemming from the Russian-Ukrainian conflict.
Truong Dinh Hoe, general secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP), told local reporters that the shrimp export turnover in 2021 reached $3.9 billion, in up 4% from 2020. Soc Trang and Ca Mau stood out as the two areas with the highest shrimp export turnover
Vietnam has more than 500 shrimp exporters serving 103 markets. Economists estimate the export turnover to be nearly 97%, focusing on eight major markets including China, Korea, the European Union, the United Kingdom and the United States.
Dinh Hoe says that shrimp exports to the United States for the first time reached a turnover of more than one billion dollars, or nearly 90,000 tons. This is a 20% increase over the previous year. Data for the European region suggests that consumption and demand for prawns in 2022 will begin to rise again – with the UK, Germany, the Netherlands and Belgium leading the way.
However, shrimp consumption in Europe is likely to be affected by the ongoing conflict between Russia and Ukraine, which will impact future business plans.
Dinh Hoe went on to tell local reporters that raw materials for processing and export are sufficient at the moment – but prices could rise as agricultural input prices fluctuate.
VASEP executives also said that inflation will increase production costs, leading to higher sales prices and weakening the growth rate of orders. The Russian-Ukrainian conflict has a strong impact on logistics costs and activities. This is no small challenge for the growth of shrimp exports.
In recent weeks, Vietnam’s shrimp exports to Russia have been reduced by the ongoing conflict with Ukraine. Although the shipments have left Vietnamese ports, it is not yet clear whether the exports will be cleared by Russian authorities or whether Russian importers will face difficulties when paying for the cargo.
In order to counter these market upheavals, leaders of Vietnam’s Ministry of Agriculture said they would work with financial institutions and industry associations to help with payments if financial transactions with Russia are blocked. They also call on the industry to further diversify its export markets and increase export volumes to its main customers, namely the United States, Europe, China and the Middle East.
VASEP’s economic forecast shows that building on expected US export expansion, shrimp purchases in 2022 could increase by 10-12%, with export turnover exceeding 4 billions of dollars. This could translate into growth in volume of between 2 and 5% and growth in value of between 7 and 10%.