Businesses must be adaptable to the shrimp export industry

DNHN - Currently, shrimp exports are slowing in many important markets; shrimp exporters must have a variety of adaptable ways to cope.

Shrimp shipments began to stall in June, with export turnover decreasing by 1% over the same time last year due to raw material constraints. Shrimp exports fell by roughly 13% in July, totalling USD 385 million. Shrimp exports totalled $2.65 billion in the first seven months of the year, a 22% increase over the same period the previous year.

According to Ms Kim Thu, a VASEP shrimp market specialist, shrimp exports to key markets in recent months are not likely to change much and are dependent on raw shrimp supplies.

The reason for the shrimp material scarcity is that the weather would be adverse for farmed shrimp beginning in May 2022; the first rain of the season arrived earlier than normal, hurting shrimp production, therefore the source of raw shrimp was not as good as in the first four months of the year.

Domestic shrimp output and international shrimp demand are expected to be negative in he last months of the year, according to Ms Le Hang, Deputy Director of VASEP.PRO Center. Shrimp production surged dramatically in producing nations, while import volume in major markets such as the US and EU increased in the first half of the year, resulting in greater stocks and lower demand in the second half of the year.

Meanwhile, due to weather and high costs, domestic raw shrimp production is experiencing problems, and there will continue to be a scarcity of raw shrimp in the second half of this year, impacting the enterprise's fulfilment of export orders.

Looking at rival nations, according to Mr Ho Quoc Luc - Chairman of the Board of Directors of Sao Ta Food Joint Stock Company, although the information is not official, it is apparent that Ecuadorian and Indian shrimp are dominating the US market and have a spillover tendency. In recent years, the EU, particularly Ecuadorian shrimp, has accounted for the lion's share of shrimp imports into the EU.

Due to a scarcity of raw shrimp and high input costs, Vietnamese shrimp enterprises concentrate on deep-processed shrimp goods and steer the market appropriately. Mr Ho Quoc Luc stated, "Despite recognizing that market redirection would not provide results in a short period, shrimp dealers must examine the trend and condition to make the appropriate preparations."

With the present high price of raw shrimp, there will be little profit if shrimp is processed into a popular product. However, when processing high-end products, the profit margin remains quite high. Shrimp entrepreneurs concentrate on creating the necessary conditions to persuade customers. The trend of customers constantly wanting items that combine as many utilities as possible, the above preparation is on the correct path, and the results will come fast if you truly put in the work.

In the last two years, Sao Ta Food Joint Stock Company has actively created a new market strategy based on identifying the output growth rate and the capacity to increase the processing level of Ecuadorian shrimp. According to Mr Ho Quoc Luc, Sao Ta now has numerous strategic goods such as breaded shrimp and fried shrimp and will continue to construct more new strategic products soon.

Despite numerous challenges, shrimp export sales this year will almost probably be greater than last year; at least 10% higher even if the output does not grow or just marginally increases, even if the real price of shrimp exports in the global market does not increase. Export sales surged as shrimp companies concentrated on more extensively processed goods with higher consumer pricing, as well as increased selling prices owing to probable transportation charges.

Because today's challenges are only transitory, the following years will be a breakthrough in raising the level of processing and the position of Vietnamese shrimp in the global market; the Vietnam shrimp value chain will be more balanced and comprehensive.

TH