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MARKET ANALYSIS

 

 

Vietnamese shrimp exports up 2.3% in Q2, 4.8% in H1

             

Vietnam shrimp exports in the second quarter hit US$732.3 million, up 2.3% year-on-year. The growth rate was lower than the 7.9% registered in the first quarter due to shortage of raw materials. Through June 2016, shrimp exports touched $1.4 billion, up 4.8% year-on-year.

 

The growth in shrimp exports was attributed to the recovery in demand from the main markets, lower inventories, more stable exchange rate, rise in export and global shrimp prices.

 

White shrimp 59% of total exports

 

In the first six months, white shrimp accounted for nearly 59% of Vietnam's total shrimp exports, while black tiger accounted for 32.9% and marine shrimp 8.4%. The proportion of white shrimp and black tiger were up 0.2%, while that of marine shrimp fell by 0.4%.

 

Sales of white shrimp products increased by 5.2% to nearly US$794 million and of black tiger by 5.3% shrimp to $444.5 million. Exports of other marine products fell by 0.5% to over $113 million.

 

Live/fresh frozen white shrimp (HS code 03) brought in the highest export value of $431.6 million, up 2.3% compared with the same January-June period in 2015.

 

Among the shrimp products for export, the highest sales growth (24%) was posted by "other processed black tiger shrimp" (HS code 16). In contrast, exports of "canned other shrimp" (HS code 16) saw the deepest dive (55.9%) with a mere value of $1.7 million.

 

Decreased markets

 

In the second quarter, Vietnamese shrimps were exported to 75 markets, a decrease from 81 during the same period in 2015.

 

The top 10 importers of Vietnamese shrimp during this period were the US, EU, Japan, China, South Korea, Canada, Australia, Asean, Taiwan and Switzerland. They all accounted for 95% of the total shrimp exports. Of the five largest markets, exports to Japan fell 8.8%, while exports to the others rose. Exports to China showed the largest increase at 41.8%, followed by the US at 13.8%, EU at 6.5% and South Korea at 6%.

 

Exports to Canada in the second quarter declined by 21.8%, Australia 9%, Asean 1.5%, Taiwan 29.4% and Switzerland 18.9%.

 

After a sharp decline in 2015, Vietnamese shrimp exports to the US in the first half of the year posted positive growth (up 13.8% to nearly $299 million compared with the same period in 2015). In the second quarter alone, exports increased 0.4% to $147 million. 

 

On July 18, Vietnam and the US signed an agreement related to antidumping duty over shrimp imported from Vietnam. The two sides reached bilateral solutions to settle two World Trade Organisation (WTO) disputes over imports of Vietnamese shrimp to the US, in which Vietnam sued the US for allegedly violating WTO regulations when imposing anti-dumping duty on Vietnamese shrimp. This agreement is good news for Vietnamese shrimp exporters, especially Minh Phu Seafood Corp., for whose dumping margin was adjusted. The US Department of Commerce (DOC) may also consider lifting antidumping duty order for this company.

 

Several factors will work to the advantage of Vietnamese shrimp exports to the US including the hike by the DOC of the average antidumping duty on shrimp imported from India to 4.98% from 2.96%. Higher antidumping duty will push up Indian shrimp price and reduce its competitiveness in price in the US market.

 

Another is the reduced prestige of Thailand shrimp in the world market due to issues of human trafficking or slave-labour conditions in peeling factories and loss of GSP (Generalised Scheme of Preferences) from the EU.

 

Still others are the decreased shrimp supply from India due to higher antidumping duty and the reduced shrimp production of Ecuador due to the April earthquake and disease outbreaks. 

 

These factors make the prospects of continued rise in Vietnamese shrimp exports to the US in the second half bright.

 

Vietnamese shrimp exports to the EU continued to increase in the second quarter, by 9.3% to $150.6 million, after a slight increase in the first quarter.

 

Shrimp exports to the EU market in the six months through June reached $262.3 million, up 6.5% year-on-year due to lower inventory and higher demand. Exports to three major markets (Germany, the UK and the Netherlands) also showed positive growths, the Netherlands posting the highest growth at 26.3%.

 

Prospects

 

In the second half of the year, the shortage of raw shrimp supply is seen to continue due to salinity issues.

 

The Vietnamese shrimp exports in 2016 is estimated to hit $3.2 billion, up 10% from 2015, despite shortage of raw shrimp supply.

 

This year, the global shrimp production is expected to decrease because of drought in many regions caused by the El Nino weather phenomenon. As a result, the global shrimp price may inch up 10-15% after the sharp decrease in 2015.

 

Source: Vasep
 
 

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