Faced with many difficulties
According to data from the Vietnam Association of Seafood Exporters and Producers (VASEP), Vietnam's shrimp export turnover in the first 3 months of 2024 is estimated to reach more than 620 million USD, an increase of 24% over the same period in 2023. Of which, shrimp export turnover to the US market is estimated to increase by 26%, while the Chinese market is estimated to increase by more than 140%.
Although shrimp exports in the first quarter showed positive signs, according to Mr. Ho Quoc Luc - Chairman of the Board of Directors of Sao Ta Food Joint Stock Company, the difficulties of the Vietnamese shrimp industry have not been overcome.
According to Mr. Luc, at the end of March, the US Department of Commerce (DOC) issued a preliminary conclusion in the anti-subsidy investigation of frozen warmwater shrimp (HS codes: 0306.17, 1605.21 and 1605.29) originating from Vietnam. The DOC has set the preliminary anti-subsidy tax rate for Vietnamese enterprises as follows: 2.84% for the only mandatory defendant enterprise and for all remaining enterprises; 196.41% for the only defendant enterprise not participating in the case.
Along with that, the risk of raw material shortage continues as at present in many farming areas, farmers are not interested in planting seeds.
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| Shrimp exports face many difficulties |
“The new shrimp season has been going on for a month, but the large farming areas have not seen the same vitality as every year. Most farmers are waiting for output prices to increase, input materials to improve…”, Mr. Luc said.
In addition, the high cost of shrimp production has reduced the competitiveness of Vietnamese shrimp in the export market. According to Mr. Le Van Quang, Chairman of the Board of Directors of Minh Phu Seafood Corporation, Vietnam's raw shrimp is mainly produced on a small scale, and raw materials for food and medicine production are largely dependent on imports, so production costs are currently about 30% higher than in India and Indonesia and several times higher than raw shrimp from Ecuador.
In addition, Vietnamese shrimp is currently competing with other countries in the logistics segment. The route for shrimp products from India and Ecuador to the US and European markets is shorter than the transportation route from Vietnam. Combining these costs, Vietnamese shrimp must compete twice as much as other countries - Mr. Quang added.
What businesses do to respond
In the context of shrimp exports facing a series of challenges, Mr. Le Van Quang - Chairman of the Board of Directors of Minh Phu Seafood Corporation said that in order to increase orders, the company has actively participated in fairs and exhibitions around the world. Most recently, the International Seafood Fair in Boston in the US to introduce the company's products to world importers. The good news is that it was highly appreciated by importers immediately after.
In the upcoming plan, Minh Phu will continue to participate in exhibition programs to introduce products, expected to be in Japan and Korea... to reach consumers in these two countries.
Besides, the company also continuously improves the quality of shrimp through biological farming technology, helping to reduce costs and increase the competitiveness of Vietnamese shrimp.
Regarding the anti-subsidy lawsuit against the US shrimp industry, Mr. Ho Quoc Luc informed that the company has prepared the best documents to explain to the DOC if requested. At the same time, the company will submit an application to the DOC to be a mandatory defendant in the anti-subsidy lawsuit to ensure the safety of the company and to receive the US Government's inspection delegation to inspect the Tin An Factory.
"Regarding internal difficulties, Sao Ta Food will overcome them by continuing to focus on deeply processed products, to optimize costs and increase productivity by specializing products in each factory and improving the quality of the workforce," Mr. Ho Quoc Luc shared.
Mr. Luc added that since July 2023, Sao Ta Food has put into operation the Vinfarm farm in Vinh Thuan, helping to expand the farming area by 203 hectares, bringing the total farming area to 525 hectares with the capacity to supply 16,000 tons of raw shrimp/year. When this farming area is fully operational, it will significantly improve the self-sufficiency capacity of raw shrimp, thereby expanding the gross profit margin of this enterprise.
At the same time, Sao Ta has also increased its raw material sources by harvesting shrimp from shrimp farms in the off-season since the end of November 2023 with quite positive farming results. Regarding market difficulties, the company will maintain existing solutions and be as flexible as possible to take advantage of all opportunities, including paying attention to exploring opportunities in the Chinese market.
Regarding the anti-subsidy lawsuit against the shrimp industry from the US, to best protect the rights and interests of businesses, the Department of Trade Defense (Ministry of Industry and Trade) recommends that the association support notifying businesses exporting the accused products to prepare a response plan and handle the case in case the DOC initiates an investigation.
For enterprises manufacturing and exporting related products, the Trade Defense Department notes that it is necessary to review the support programs/policies received (if any) during the investigation period, prepare relevant documents and records in advance. Determine in advance the strategy for participating and handling the case in case the DOC initiates an investigation. Proactively research and master the regulations and procedures for US anti-subsidy investigations, and request information from the DOC to comply properly in case of participating in the case.
On the other hand, plan and prepare resources in advance for handling the case. In particular, closely coordinate with the association and the Department of Trade Defense throughout the process of the case.
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