In the first quarter of 2022, Vietnam's seafood exports maintained positive growth compared with the same period last year, of which shrimp exports still maintained the highest proportion. However, although Vietnam's shrimp export volume ranks third in the world, the Vietnamese shrimp industry still has deficiencies in both input and output, and long-term solutions are needed to sustainably develop and maintain its position.
First, the problem of vietnam's shrimp industry itself
According to the General Directorate of Fisheries of Vietnam, the aquaculture area of saltwater shrimp in Vietnam will be 747,000 hectares in 2021, and the production of saltwater shrimp culture will reach 970,000 tons in 2021, of which 265,000 tons are produced by Penaeus monodon, 665,000 tons are produced by Penaeus vannamei, and the rest are other shrimp. In order to achieve the above shrimp farming production, the Vietnamese shrimp industry needs an average of about 130 billion shrimp fry per year, of which: 100 billion white shrimp and 30 billion penaeuson seed. In 2021, there were 2,063 saltwater shrimp hatcheries with a production of 114.5 billion, an increase of 11% over the same period in 2020, and the shrimp fry production facilities fully met the seed needs of farmers.
1. Broodstock problem
However, the root cause of the shrimp fry problem lies in broodstock, and the research and production results of viet nam broodstock are still very limited. Vietnam itself can only meet a small fraction of broodstock (by 2021, the total number of broodstock produced in the country will reach about 21,000 white shrimp and 20,000 penaeus macrodon); Broodstock used in shrimp fry production are mainly imported. The Vietnamese shrimp industry imports about 200,000 pairs of broodstock every year, of which 53.5% are imported from the United States, more than 20% from Thailand, and the rest from other sources.
According to the 2022 plan, the fisheries department has proposed a target of 750,000 hectares of cultured area, of which 625,000 hectares of shrimp and 125,000 hectares of white shrimp, and strives to produce 980,000 tons of various types of shrimp, with exports exceeding US$4 billion, an increase of 2.56% over 2021. Therefore, the demand for broodstock to produce sufficient shrimp fry is about 260,000-270,000 pairs. This also places higher demands on the shrimp industry in terms of producing and meeting seed demand.
Not only is the supply of broodstock difficult, but vietnam's shrimp production and processing industry is also facing other difficulties and deficiencies. Usually, shrimp fry quality and disease control issues in the farming process have always been a dilemma for farmers. In the process of shrimp farming, shrimp fry is one of the key issues for successful farming. Excellent species, disease-free, high survival rate, resistance to the environment, shrimp growth fast, help to reduce the cost of breeding, for farmers to bring the best economic benefits. However, the production of shrimp fry is worrying, especially the poor quality and unknown source of shrimp fry for many years, which has always been a pain point plaguing the shrimp industry.
In addition, quality management of shrimp fry is weak in some places. Poor quality of shrimp fry may be a risk factor for disease outbreaks. Although the General Directorate of Fisheries often cooperates with various localities to organize inspections and surprise inspections as planned, the quality and traceability of shrimp fry have not been completely solved.
2. Weather problems
In addition to the shrimp fry problem, shrimp production in Viet Nam and many other countries is heavily affected by weather factors, and most of The aquaculture areas in Viet Nam are concentrated in the Mekong Delta region, which is most affected by climate change, which can lead to problems such as drought, saltwater invasion and animal diseases. The Department of Fisheries warns that in 2022, the area of shrimp culture destroyed could increase dramatically and the risk of disease is very high, as farmers begin to increase their farming density in the event of persistent inclement weather. In addition, the overuse of antibiotics in aquaculture has long been a focus of attention, but there is still no solution to completely eliminate antibiotics.
3, the problem of breeding costs
Another factor that hinders and threatens the competitiveness of the Vietnamese shrimp industry is the cost of farming. At present, the cost of farming in Vietnam is still higher than that of other countries in the region. The main reason is that the price of shrimp feed accounts for more than 65% of the cost of shrimp farming, and shrimp fry cannot be guaranteed due to the high cost of shrimp fry due to broodstock imports, high material transportation costs, and breeding infrastructure. In particular, aquaculture irrigation systems are still mainly used in conjunction with irrigation systems for agricultural production. This results in water sources being easily contaminated with waste during production and daily life. In addition, the water supply and drainage system is not safe, and there are no water treatment ponds in intensive breeding areas, which are prone to diseases. At the same time, the current technique of extensive shrimp farming is not suitable.
Second, the export environment also makes the shrimp industry difficult
In terms of the export of products, the shrimp industry, like many other processing industries, has encountered many difficulties due to the development of diseases, disruptions caused by economic and political conflicts, which have affected the economy of international trade in goods. The United States is Vietnam's largest shrimp export market, with exports exceeding $1 billion in 2021, up 20 percent from 2020. However, inflation and supply chain disruptions have led to signs of decline in sales revenue for U.S. seafood retail. According to Vietnam's Ministry of Industry and Trade, sales of frozen seafood in the U.S. fell 9.4 percent to $576 million in February 2022; fresh seafood sales fell 12.0 percent to $521 million; shellfish sales fell 9.1 percent; according to Vietnam's Ministry of Industry and Trade. Fish fell 3.7 percent and pickled seafood fell 4.8 percent. The survey showed that nearly 90 percent of U.S. consumers surveyed were concerned about inflation.
The economic impact of the Russian-Ukrainian conflict could exacerbate supply chain disruptions, pushing up the prices of certain commodities. According to an IRI survey, 41 percent of shoppers want to save money with promotions, while 39 percent want to go on a promotion when they buy in bulk or "buy one get one free." However, 38% of respondents said they would save money by buying less. This will have a big impact on seafood exporters, especially in the shrimp industry, as the United States is Vietnam's largest shrimp export market share.
The Russian-Ukrainian conflict has also created direct difficulties for the export of seafood, especially shrimp from Vietnam. Russia is a potential market with high demand and tariff advantages from the Vietnam-Eurasian Economic Union (EAEU) free trade agreement. The main shrimp products exported to the market include: fresh headless white shrimp, tailless and tailless frozen shrimp, fresh headless white shrimp... Vietnam's Ministry of Industry and Trade also said that due to the disconnection of the International Payment System (SWIFT), many goods have been exported to Russia, but the ability to clear customs is still uncertain, and most enterprises exporting shrimp to Russia are currently experiencing difficulties in bank settlement. The announcement of non-shipments by large shipping companies and their arrival in Russia has also led to supply chain breakages, rising transportation costs, and bringing many difficulties to businesses.
Not only affected by the Russian market, Vietnam's seafood exports, especially shrimp exports, are expected to face many difficulties in 2022 due to the impact of the overall situation in the world and other international markets. Although seafood exports in the first quarter of 2022 achieved the highest result so far in the first quarter of each year, it heralds a year of good prospects for seafood export growth. However, Vietnam's seafood exports are likely to slow down in the coming period, as global seafood consumer demand is likely to slow with the impact of inflation and operational difficulties. Since the beginning of 2022, sea freight rates on U.S.-Europe routes have continued to rise, putting pressure on seafood prices. In addition, the gradual control of the global Covid-19 epidemic, the gradual recovery of aquaculture activities and the increase in supply will put competitive pressure on the market, and seafood prices may fall in the near future.
Third, when will vietnamese shrimp exports exceed the target of 10 billion US dollars be achieved?
In 2022, Vietnam's shrimp industry is expected to exceed the US$4 billion mark, an increase of 10%-12% year-on-year, of which price factor growth contributes about 7%-10%, and increased production generates 2%-5% contribution. To achieve this, the shrimp industry needs to deploy stronger solutions to address product consumption, inputs and outputs, farming costs, the environment, disease and strong trade facilitation. In terms of international trade, maintain the existing market, and constantly seek and expand the international market, only in this way can Vietnam be expected to complete the shrimp export target of 10 billion US dollars by 2025.