Vietnam’s shrimp exports to the EU have recovered since the beginning of the third quarter of 2020 due to solid growth demand in the European market after the pandemic. According to VASEP, shrimp exports to the EU in January 2021 increased by 16% from the previous year to reach USD 30 million. This same month’s total exports for the Vietnamese shrimp were USD 124 million, a 22% increase from the previous year.
The EU is currently Vietnam's fourth-largest shrimp importer after the US, Japan, and China, accounting for about 20% of Vietnam´s export share. However, there are positive signs that point out the EU may considerably increase its imports from Vietnam. The first sign is the reported increasing demand from Northern European markets since the beginning of the year. Denmark increased its imports of Vietnamese shrimp by 72% in January, the Netherlands increased by 30.6%, Germany by 27.5%, and Belgium by 2.1%.
The whitleg shrimp accounted for nearly 80% of the total export value in terms of products, estimating an increase of 9% for the 2021 year in processed, raw, fresh, and frozen types. The growth estimation for the rest 20%, represented mainly by processed tiger shrimp, is 6.7%.
Source: ITC Trade Map, Tridge
The Netherlands is the largest shrimp import market of Vietnam in the EU, accounting for 28% and 3.9% of Vietnam's total global shrimp export value. From February 2020 up to March 2020, shrimp exports to this market have been almost unaffected by Covid-19 and have continued to have positive growth.
Vietnamese shrimp has also gain advantages in terms of tariffs thanks to The EU-Vietnam Free Trade Agreement (EVFTA) signed in 2019. According to VASEP, thanks to the agreement’s positive impact, Vietnamese shrimp exports recovered since the third quarter of 2020. Shrimp exports to the EU in the third quarter reached the highest growth that year with an increase of 42% with a USD 65.4 million compared to the same period last year.
The U.S. Customs and Border Protection (CBP) announced in February 2020 that there is no reason to conclude that Vietnamese shrimp companies cause anti-dumping tax evasion currently applied to Indian shrimp imports. The CBP then cancelled the investigation on a specific Vietnamese company that asked for a review of the investigation.
The US is the leading market for Vietnamese shrimp exports, accounting for 24% of Vietnamese shrimp’s total export value. The export value to the U.S. in 2019 was USD 635 million, a 29% increase from the previous year (2018). Despite Covid-19, the Vasep has announced that the U.S. market keeps growing at an accelerated rate, and Vietnamese shrimps are gaining share market year on year.
Source: ITC Trade Map, Tridge
For the U.S. market, Vietnamese shrimp has a competitive advantage against rivals such as India, which is the leading shrimp supplier with a 46% share on frozen shrimp and around 18% on process shrimp. India has reported difficulties on its 2021 production and supply due to the Covid-19 pandemic and unfavorable weather conditions. Indonesia is a strong competitor on frozen shrimps, with 18% of the share behind India.
Thailand and China are also two strong suppliers for the U.S. market and direct competitors to Vietnam in the frozen section. Thailand exported USD 257 million in 2019 and accounted the 21% of the share, while China exported USD 150 million and represented 9% of the U.S. market.
Experts noted that shrimp prices on the global market are projected to rise in the first half of this year, adding another positive sign for the 2021 Vietnamese year. The forecast has been projected as a highly positive one; however, considering all variables, there is no reason to believe that Vietnamese shrimp exports won´t reach the USD 4 billion goal.
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