June 20, 2012

 

Vietnamese seafood exporters focusing on US market

 

Vietnamese seafood exporters are focusing on US buyers as they attempt to work around plunging sales in the EU market.

 

Nguyen Thi Hong Minh, former Deputy Minister of Fisheries, now the Ministry of Agriculture and Rural Development (MARD), said that Vietnamese seafood companies now prefer the US market because they may be able to take advantage of lower tax rates, which were chosen by the US Department of Commerce (DOC) after the seventh administration review (POR7) in March 2012.

 

But Minh warned that mass exports to the US market may backfire.

 

"Competent agencies need to analyse the situation. The massive exports to the US may trigger anti-dumping lawsuits to be raised by the US farmers' associations," Minh explained, according to reports.

 

"Competent agencies need to appoint their officers to be in charge of examining and supervising the tra fish (pangasius) exports of enterprises," she advised.

 

Analysts have also cautioned that once too many Vietnamese exporters focus on the US market, prices may be forced down.

 

Deputy Minister of Industry and Trade, Nguyen Thanh Bien, agreed that if state management agencies do not get involved soon to diffuse the situation, there may be excessive growth in pangasius exports to the US market, which could breed negative results for Vietnamese businesses come the next administration review (POR).

 

The Vietnam Association of Seafood Exporters and Producers (VASEP) expects to see a bad business performance on the part of seafood companies this year. The 11% growth rate in the first four months of the year and 0.9% growth rate in April are the lowest in the last three years, VASEP informed.

 

Challenges currently being faced by seafood firms include capital and raw material shortages, plus increasing input costs and narrowed export markets.

 

Exports of shrimp and tra, the two main seafood export items, have been dropping since April. Shrimp exports fell by 6.5% to US$163.2 million and black tiger shrimp exports dropped by nearly 22% as a result of disease epidemics and a low demand for high-grade products.

 

Pangasius exports yielded US$143.6 million, a decrease of 0.9% on-year. Analysts have warned that the tra exports would take a deeper dive if enterprises and farmers continue to fail to gain access to bank loans.

 

Seafood exports to the EU skid by 12% in the first four months of 2012, of which shrimp exports were down by 30% and tra by 14%. The growth rate in exports to the US has decreased by two-thirds, although these exports still account for 20% of total exports.