As of the end of July 2024, Vietnam’s shrimp exports have reached a cumulative value of nearly $2 billion, marking a 7% increase over the same period in 2023. While this growth is promising, the road ahead remains challenging. To achieve the ambitious goal of $4 billion to $4.3 billion in shrimp exports by the end of the year, Vietnam’s shrimp industry must adopt strategic measures and rapidly adapt to the evolving global market landscape.
Growth Amidst Global Challenges
The shrimp industry in Vietnam has seen positive growth in the early months of 2024, but this does not fully reflect the significant challenges that lie ahead. Major export markets such as the United States, the European Union (EU), and Japan present a tough reality for Vietnamese shrimp exporters.
Data from Vietnam Customs highlights that by mid-June, shrimp exports to the United States exceeded $262 million, a 2% increase compared to the same period in 2023. However, this growth was met with obstacles as high inflation in the U.S. led to tighter consumer spending. Consequently, shrimp exports to the U.S. saw a decline in April and May.
Moreover, Vietnamese shrimp face intense price competition from other major shrimp-producing countries like Ecuador and India. This price pressure, combined with rising logistics costs, creates a complex environment for Vietnam’s shrimp exporters.
The Logistics Challenge
One of the most significant hurdles facing Vietnam’s shrimp exporters is the sharp rise in freight rates. Since May 2024, shipping costs have surged by over 40%, driven by higher fuel prices, the need to avoid conflict zones, and the rising demand for empty containers. This increase in transportation costs puts Vietnam at a disadvantage in price-sensitive transoceanic markets, especially given the need for refrigerated containers to maintain the quality of seafood products during transit.
Maintaining Momentum in a Difficult Market
Despite these challenges, Vietnam’s shrimp industry has managed to maintain its growth momentum. In July 2024, export turnover for major aquatic products improved, with shrimp exports alone increasing by 11%—the highest growth rate seen this year. Notably, Vietnam’s shrimp exports to China and the EU increased by 24% and 32%, respectively, while exports to the U.S. grew by 9%. However, not all markets showed positive results, with exports to South Korea falling by 21%.
The Vietnam Aquatic Products Processing and Export Association (VASEP) remains optimistic about the near-term future of the shrimp export market. With the end of the third quarter approaching, import demand from China and the U.S. is expected to rise as these countries prepare for domestic consumer needs during the year-end holidays.
Strategic Adaptation for Future Success
While the challenges are significant, the potential for growth in Vietnam’s shrimp industry remains strong. Success in the coming months will depend on the industry’s ability to implement reasonable and accurate strategies that respond to market changes. By capitalizing on the “golden season” of aquaculture at the end of the year, Vietnam’s shrimp export companies have the opportunity to “go against the current” and achieve their annual export targets of $4 billion to $4.3 billion.
In conclusion, while the path forward is fraught with obstacles, Vietnam’s shrimp industry has shown resilience and adaptability. With continued determination and strategic action, the industry can overcome these challenges and secure its place as a leading global shrimp exporter.
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