Shrimp processed at a factory in Quang Ninh province. High inflation in many major import markets has forced Vietnamese producers to look elsewhere for customers. (Photo: VNA)Hanoi (VNS/VNA) – Vietnam people shrimp industry Business leaders say it has weathered a tough year of weakening demand and has come to the fore.
Ho Quoc Luc, chairman of Sao Ta Foods JSC, revealed that his company was struggling to cope with declining revenues and rising costs.
The decline in sales was due to the fact that high inflation in the US and EU curtailed consumption and reduced orders from abroad.
A depreciation of the euro against the Vietnamese dong and rising transportation costs in major importing countries exacerbated the situation and added to the bill.
In an unfavorable environment, the company has successfully doubled into processed seafood, targeting the high-end market to make up for lost revenue.
He said Japan is an alternative market for large-scale processed shrimp, in which Vietnamese companies have a significant competitive advantage over rivals in Ecuador and India.
Thanks to the changing customer base, the company was able to maintain sales and turn the low transportation costs in the market to its advantage.
Truong Dinh Hoe, general secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP), estimates that Vietnam’s total shrimp exports will reach US$4.3 billion in 2022, increasing by 10% year-on-year.
He signed a free trade agreement (FTAsCPTPP and EVFTA) are one of the factors that have helped Vietnamese shrimp producers achieve such high figures during difficult times.
The agreement has given Vietnamese shrimp a tariff advantage over shrimp from non-FTA countries, making it easier for seafood to enter foreign markets.Specifically, Vietnamese shrimp export Exports to Canada, Mexico and Australia increased by 30% on the back of trade agreements.
Patience was another factor. Ho said shrimp producers in Vietnam are keeping their shrimp farms alive even at the peak of the pandemic. This risky move has stabilized production and hastened the post-pandemic recovery.
“One lesson learned from the pandemic is that perseverance is the key to recovery. It didn’t take,” Ho said.
Le Hang, Communications Director Vassepsharing Ho’s view, said the FTA was a major factor helping Vietnam’s seafood exports maintain momentum in 2022.
Surprisingly, Vietnam’s seafood exports to CPTPP member countries increased 315 times over the year, earning US$2.9 billion. She said the tariff benefits induced by the FTA were fully utilized to boost sales, filling the gap left by weakening demand in other countries.
The director believed FTA members, particularly ASEAN and China, would remain the best options for inflation-ravaged importers in 2023.
“China is expected to ease its ‘Zero COVID’ policy in the short term, opening up a market of 1.5 billion potential customers to Vietnamese seafood producers.
With such a golden opportunity in front of her, she urged producers to stockpile raw materials and mobilize capital to gain the upper hand once the country was fully opened./.
