Vietnamese Shrimp Market Guide

The trend in demand for Vietnamese shrimps is positive. Vietnam is the second-largest shrimp exporter in the world, and its shrimp exports have been growing steadily in recent years. In 2021, Vietnam exported 710,000 tons of shrimp, valued at $4.2 billion. This represents a 10% increase in volume and a 15% increase in value compared to 2020.

• Market Dynamics

Farmers: Small size farmers represent 70-80% of the total market share, whereas only 20-30% is represented by big farmers. However, as more and more big farms buying small farmers and M&A is going on between small farmers, the percentage of big farmers is increasing recently.

Processing: Vietnam is a major exporter of shrimp itself, but it also imports unprocessed frozen shrimp from Ecuador and India. Vietnam is one of the top 5 importing countries of Ecuadorian and Indian shrimp, with USD 308 million and 193 USD million, respectively.

• Increased investment in shrimp processing facilities: As Vietnam becomes one of the world-leading suppliers, there has been a strong flow to increase investment in shrimp processing facilities. During the pandemic era, 6 processing facilities opened, with a combined capacity of 100,000 tonnes.

Competitive Landscape (Subjective): Compared to Indian and Ecuadorian shrimp, Vietnamese shrimp show higher prices as more delicate farming technology is applied and feed quality is higher. 

• Supply Chain Composition

Feed Mills & Hatcheries -> Farm -> Factory -> Export Company (Most big exporters own their processing facilities)

Feed mills & Hatcheries: The feed industry in Vietnam is dominated by foreign companies

• Feed price overall is high compared to other major producing countries.

• Large commercial hatcheries sell high-quality seeds.

• In terms of hatcheries, Viet Uc Seafood represents 25% of the total market, and the other 2,500 small hatcheries claim 50% of the market.

Farmers: Vannamei is farmed in North Central and Southern Vietnam, and Black tiger shrimp can only be farmed in Southern Vietnam.

• Farmers sell their products directly to the processing facilities with few to no brokers/agents in between.

Processing facilities: 100 Shrimp processing companies in Vietnam and half of them are located in the Mekong Delta region.

Exporters: As for the big farms/exporters, they are able to supply year-long and also, since they have their own packing facilities, farm, and hatcheries – More flexible

• Except for the big exporters, Exporters often buy from other farmers to meet demands with a short-term contract.

Farmers source shrimps from the sea or a farm and for exports, the main varieties are Black Tiger and White Leg. There is no specific seasonality for shrimps as these are available year-long. Most of the time, farmers sell their products directly to the processing facilities with few to no brokers/agents in between. However, farmers/suppliers do not usually export directly. As for the big farms/exporters, they are able to supply year-long and also, since they have their own packing facilities, they are more flexible in terms of order specifications and timeline. Exporters with their own farms often need to buy from other farmers or cooperate with farmers from specific areas with a short-term contract to utilize the same farming system and resources.

• Supply Network

Co-ops exist among suppliers but they are very fragmented. Farmers form a co-op to be able to supply to several exporters and to have more power when negotiating prices. An example of a farmer co-op is the Shrimp and Prawn Association that is led by the Vietnamese Seafood Group.

• Major Suppliers

• Top 9 suppliers account for 82% of total exports.

• Small size farmers represent 70-80% of the total market share, whereas only 20-30% is represented by big farmers, but recently, the proportion of big farmers has been increasing as big farmers started to buy small farmers.

The top importers of Vietnamese shrimp in 2022, along with the export value to each country, are as follows:

Rank Country Export value (USD billion)

1 United States (1.7)

2 Japan (1.1)

3 China (0.6)

4 European Union (0.4)

5 South Korea (0.3)

Total export value to the top 5 importers: USD 4.1 billion

These five countries accounted for over 70% of Vietnam's total shrimp exports in 2022.

The Vietnamese shrimp industry is expected to continue to grow in the coming years, driven by increasing global demand and government support for the industry.

Vietnamese Shrimp is available all-year round, but there is a high season and a low season depending on the region.

1. Receive the order specifications -> 2. Check the resources and material prices -> 3. Quote price to buyer -> 4. Sign contract -> 5. Collect shrimp materials -> 6. Process requirements -> 7. Packing -> 7. Warehouse stocking -> 8. Loading to the container -> 9. Ship to buyer

Deals are mostly done in CIF or FOB terms.

•Quality Issues

The most common quality-related issues are regarding freshness and size. 

•Checking Process

Quality check is done on the manufacturing level and the yield rate is one of the most important factors when inspecting shrimps. Third-party inspections may be required depending on the buyer. If there are issues with the quality of the shrimp as reported by the buyer, the buyer would need to send evidence of the issue (photos), which the processing facility would then check. If the issue occurred during transportation, the logistics company would be contacted. 

The top five shrimp export markets for Vietnam in 2022 were:

1. United States

2. Japan

3. China

4. European Union

5. South Korea

The Vietnamese shrimp industry is expected to continue to grow in 2023, driven by increasing global demand for shrimp and the government's support for the industry. However, the industry is facing some challenges, such as rising production costs and trade barriers.

According to data from the Vietnam Association of Seafood Exporters (VASEP) and other online sources, the Vietnamese shrimp market is facing a number of current issues, including:

Rising production costs: The cost of producing shrimp in Vietnam has been rising in recent years, due to factors such as increasing feed prices and labor costs. This has put some pressure on shrimp producers in Vietnam.

Trade barriers: Some countries have imposed trade barriers on Vietnamese shrimp, such as high tariffs and import quotas. These barriers can reduce the demand for Vietnamese shrimp in these markets.

Sustainability concerns: There is some concern about the sustainability of shrimp farming practices in Vietnam, such as the use of antibiotics and chemicals. These concerns need to be addressed in order to ensure the long-term viability of the Vietnamese shrimp industry.

Fragmentation: The Vietnamese shrimp industry is highly fragmented, with many small-scale farmers and processors. This can make it difficult to coordinate the supply chain and ensure the quality of shrimp products.

Lack of transparency: There is a lack of transparency in the Vietnamese shrimp supply chain, which can make it difficult for consumers to know where their shrimp is coming from and how it was produced.

The Vietnamese government and industry stakeholders are working to address these challenges and improve the efficiency and sustainability of the Vietnamese shrimp supply chain. For example, the government is providing support to shrimp farmers to help them improve their production practices and reduce their environmental impact. The industry is also working to develop more sustainable shrimp farming practices and to improve the traceability of shrimp products.

Despite these challenges, the Vietnamese shrimp market is expected to continue to grow in the coming years, driven by increasing global demand for shrimp.