June 28, 2012

Vietnam's shrimp exporters face strong foreign competition

Due to fiercer competition from foreign rivals and stricter regulations imposed by importing countries, Vietnamese shrimp exporters are experiencing major challenges, according to the Shrimp Committee.

The committee, which is under the Vietnam Association of Seafood Producers and Exporters, said that in contrast to Vietnam, Thailand and India was enjoying better shrimp harvests.

Thailand expected to gain a shrimp output of 600,000-700,000 tonnes this year, up 20% over last year. The Thai government has also planned to spend at least THB1 billion (US$32 million) to buy roughly 10,000 tonnes of shrimps in the domestic market for inventory to support its farmers in the case of shrimp price reduction.

India also forecast a shrimp output of 100,000 tonnes this year, up 30% over last year. India has recently succeeded in raising its market share in the US to 8% from 5% last year. India is currently considered a major competitor to Vietnamese shrimp exporters in the US market, especially of large-sized shrimp.

Chairman of the Shrimp Committee Ho Quoc Luc was further concerned about a possible reduction in shrimp exports to Japan this year as Japan has recently decided to increase its frequency of tests for trifluralin and enrofloxacin in shrimp imports from Vietnam.

Despite the difficulties, industry insiders said that there were still advantages for domestic shrimp exporters in the US market.

Tran Thien Hai, general director of the Minh Hai Seafood Joint Stock Company, said that anti-dumping tariffs imposed by US authorities on Indian shrimp are higher than Vietnam's. The tariff for Vietnamese shrimp is 1% against 2.51% of Indian.

Thai exported shrimp prices are also less competitive than Vietnam's as input costs of the Thai industry are likely to surge by roughly 10-20% in the wake of the country's decision to increase its minimum salary by 40% recently.

Shrimp is the key export staple of Vietnam's seafood industry and the country expected to earn roughly US$2.5 billion from the product's export this year. According to the General Office of Customs, the country's shrimp is shipped to 70 international markets, of which Japan and the US are the biggest importers.

More than 38,380 hectares of shrimp pond, about 5% of the total area, have been infected with hepatopancreas caseation disease, according to the Directorate of Fisheries. However, this is much less than last year, when more than 97,000 hectares, mainly in Soc Trang, Bac Lieu, Ca Mau and Ben Tre provinces, was affected.