Briefing of seafood market in the first six months of 2020

Decline in Pangasius Prices Amidst COVID-19 Challenges

The prices of pangasius, a key seafood product in Vietnam, have experienced a significant decline since early 2020, primarily due to the spread of COVID-19. The prices of pangasius material in the Mekong Delta have fallen by 40% compared to the previous year.

Size 700-800g/pc is now ranging at 17,500 – 18,000 dong/kg, while the production cost has dropped by 45% to 21,000-22,000 dong/kg. The pandemic has disrupted production and exports, leading to a decline in demand and selling prices. Consequently, sales to the US fell by 16% and to ASEAN dropped by 24.4%.

Additionally, the abnormal drought and salt intrusion in the Mekong Delta have further impacted pangasius farming areas, causing many farmers to halt stocking due to water scarcity and inadequate irrigation infrastructure.

Increase in Shrimp Prices Signals Positive Shift

In contrast to the decline in pangasius prices, the prices of shrimp material in the Mekong Delta started to increase in May 2020 and remained high in June 2020. White leg shrimps size 100 pcs/kg were sold at 95,000-100,000 dong, marking an increase of 15,000 – 20,000 dong/kg compared to the previous three months.

Similarly, black tiger shrimps size 30 pcs/kg were sold at 200,000 – 230,000 dong, up by 30,000 – 40,000 dong/kg. This surge in prices can be attributed to a limited stockpile in markets and an increase in sales through supermarkets and retailers, compensating for the decline in consumption at restaurants and hotels during the pandemic as consumers prefer cooking at home.

Production and Exports Overview

Vietnam’s seafood output in the first five months of 2020 reached 3.04 million tons, showing a 2.2% increase compared to the previous year. The yield of wild-caught species decreased by 2.2% to 1.5 million tons, primarily marine species, which declined by 2.1%.

However, farm-raised species witnessed a positive growth of 6.8% to reach 1.54 million tons, with fishes reaching 1.05 million tons (down 2.8%) and shrimps reaching 252,200 tons (up 6.5%). Notably, black tiger shrimp saw a marginal increase of 0.9% to 88,300 tons, while white leg shrimps experienced a significant growth of 9.5% to 104,900 tons.

Impact on Imports and Exports

Imports into Vietnam declined by 4.2% to $698.97 million in the first five months of 2020, accounting for 0.7% of the country’s total import volume. Seafood export volume in May reached $648.81 million, showing a 4% increase compared to April, but a decline of 15.9% compared to the same period last year.

Notably, Japan remained the largest importer of Vietnamese seafood, accounting for 19% of the country’s total seafood exports, followed by the US (17%), the EU (14.7%), China (12.9%), and Korea (9.8%). However, exports to the EU and the US faced declines of 13.2% and 3.8%, respectively.

Forecasts and Outlook

The forecast for the seafood industry suggests that exports will gradually recover in the coming months, especially as the EU market reopened in May and demand continues to grow. However, the ongoing COVID-19 pandemic in the US and other countries will likely continue to impact global seafood trading, making it challenging for Vietnamese seafood exports to fully recover in the latter part of the year.

It is anticipated that Japan will become the largest destination for Vietnamese seafood in 2020, compensating for the decline in EU and US sales. Additionally, Vietnam’s shrimp exports are expected to increase after the pandemic, as major shrimp-producing countries such as India, Ecuador, and Thailand have experienced disruptions due to lockdown measures.

The implementation of the EU-Vietnam Free Trade Agreement (EVFTA) and the favorable duty rates for seafood going into the US will further enhance Vietnam’s competitiveness in these markets. As a result, a surge in shrimp exports is projected for July.