Seafood Exports Fell Sharply in The First Quarter Of 2023

In the first quarter of this year, affected by inflation, seafood production and export situation continued to calm, import demand decreased, production and export input costs increased.

According to the Vietnam Association of Seafood Exporters and Producers (VASEP), the top five major seafood export markets, which account for 58.18% of the total exports of the industry in the past two months, all saw sharp declines, including Japan, which reached $187 million, down 11%;

The United States reached $155 million, down 55%; China reached $151 million, down 11 percent; South Korea $104 million, down 14%; Thailand reached $44 million, down 15 percent.

Among them, shrimp, the main export item, is also the biggest decline item, 40%, worth $335 million; Basa fish fell 38% to $240 million. Tuna is worth $109 million, down 30%; Crabs and other crustaceans by 46 percent...

A common situation in most seafood businesses today is "hungry" orders, or the inability to find raw materials to buy even if there is an order. If there are raw materials without workers, it will cause a lot of difficulties for the fishing industry.

In previous years, businesses generally sign orders for the fourth quarter, but now they sign a cabinet by cabinet.

Mr Chang Ting Hoa, secretary-general of the Vietnam Association of Seafood Exporters and Producers (VASEP), also cited two reasons for the "dismal" seafood exports in the first quarter of this year.

First, aquatic feed factors. At present, the raw material price of aquatic feed production is at a historical high and unstable, leading to the high production cost of aquatic feed and aquatic products.

The aquaculture industry is grappling with cost and competitiveness issues.

Specifically, the price of raw Vietnamese shrimp is 20-30% higher than the price of the same type of shrimp in India and Ecuador.

Among them, feed cost is the dominant input cost of aquaculture aquatic products. In fact, soybean meal is the main feedstock, accounting for 80-90% of the cost of aquatic feed and animal feed.

However, according to Government Decree No. 101/ND-CP of 15 November 2021, this commodity has a higher import price and is not eligible for import duty reduction such as wheat and corn.

Especially aquatic feed industry, and even the whole feed industry, are facing the risk of a sharp decline in output, high price and declining competitiveness.

Accordingly, on March 15, 2023, the Vietnamese Association of Seafood Exporters and Producers sent official Letter No. 24 to the Ministry of Finance and the Ministry of Agriculture and Rural Development proposing to reduce the import duty on dry beans from 2% to 0%.

This has helped companies in the sector to invest boldly in production, continuing to cement Vietnam's position as one of the world's leading seafood producers and exporters, while contributing to inflation control and macroeconomic stability.

The second is related to the Korean market. South Korea is a big market for Vietnamese seafood, including shrimp.

Vietnam, Korea stop shrimp supplier, supplies more than 50 percent of the 100,000 tons of shrimp imported from Korea each year.

The free trade agreement between Vietnam and South Korea, which has been in place since 2015, appears to have boosted trade and import tariffs on Vietnamese shrimp products. However, according to detailed information from VASEP member companies, the South Korean government requires auctions to purchase quota shrimp imported into the country from Vietnam at 14-16 percent of the value of imports.

Those who exceed the quota (import and export quota) will be taxed at 20%.

Therefore, imposing a 14-20 percent tax rate on Vietnamese shrimp imported from South Korea is not in line with the spirit of the Vietnam-South Korea Free Trade Agreement. In particular, the discrimination is more obvious when compared with the Korea-Peru FTA, because shrimp imported from Peru is subject to a 0% tax rate without quotas.

Accordingly, the Vietnamese Association of Seafood Exporters and Producers (VASEP) sent official letter No. 25 to the Minister of Industry and Trade, requesting the government, the Ministry of Industry and Trade and the Ministry of Foreign Affairs to review and make a recommendation that the Korean side consider abolishing the quota on shrimp imports from Vietnam.