Weaker markets, lower export prices, food-safety issues and fierce competition all conspire to lower Vietnam's earnings from shrimp exports by US$1 billion in 2015.
Vietnam shrimp export earnings seen less US$1B
Vietnam's 2015 earnings from shrimp exports are expected to fall to just around US$3 billion, less $1 billion from last year's $4 billion, according to the Vietnam Association of Seafood Exporters and Producers (Vasep).
Vasep blamed weaker markets, lower export prices, food-safety issues and fierce competition from other shrimp-exporting countries for the slump.
Ca Mau province, Vietnam's top shrimp producer and exporter, expects its export turnover to reach only $1.1 billion in 2015, which is 18% lower than the previous year, according to the province's People's Committee. It has blamed stiff competition for this drop.
Latest data from the Department of Agriculture and Rural Development also showed that in Cau Ngang district, Tra Vinh province, which is another significant shrimp producer, 41% of some 6,000 shrimp breeders suffered losses this year, while nearly 11% broke even and the rest made insignificant profit due to market fluctuation and low export prices.
Kien Giang province's export turnover is forecast to fall by 18.37% this year, according to the Department of Industry and Trade.
Tran Van Linh, director general of seafood firm Thuan Phuoc, said that many countries have reduced their shrimp imports and that export prices dropped by about 30%, resulting in export value plunge. Exchange rate fluctuations have also affected the shrimp industry's competitiveness, he added.
Mr. Ho Quoc Luc, director general of food company Sao Ta, lamented that while most input costs have steeply increased, output has sharply diminished.
Meanwhile, Vietnamese shrimp faced competition from rival countries, deputy head of the Directorate of Fisheries Nguyen Thi Thu Nguyet told a conference reviewing the performance of the industry on Dec. 25.
She said that many shrimp-producing countries that had recovered from disease outbreaks have returned to their normal production capacities, competing with shrimp products from Vietnam.
The shrimp sector has also been affected by findings that more seafood export shipments failed to meet food-safety requirements
Vietnam's seafood exports found to contain banned antibiotics and which failed to meet food-safety requirements in importing markets during the period January-September exceeded the volume in all of 2014, according to the National Agro-Forestry-Fisheries Quality Assurance Department (Nafiqad).
Nafiqad, which is under the Ministry of Agriculture and Rural Development, reported that 165 seafood shipments failed to meet food-safety requirements and 78 shipments were detected to contain higher-than-allowed residues of chemicals and antibiotics during the nine-month period, up six and 10 shipments from last year, respectively.
Nafiqad said that in the January-September period, domestic seafood exporters got food-safety warnings for their shipments in the US, Japan and the European Union, the three leading seafood markets of Vietnam.
Nafiqad found out that many farmers had not strictly followed regulations on using permitted chemicals and antibiotics before harvest.
Local testing was also to blame as seafood samples were recognized as meeting food safety requirements in Vietnam but failed in tests in foreign markets.
In November, according to the Directorate of Fisheries, total shrimp farming area in Vietnam was estimated at 682,000 hectares, of which 596,000 was devoted to black tiger shrimp farming and 86,000 to vannamei (white-legged shrimp). Shrimp production was estimated at over 555,000 tonnes, of which 255,000 tonnes are black tiger shrimp and 300,000 tonnes are white-legged shrimp.