However, the product is gradually revealing weaknesses, making it difficult to compete with major competitors in the international market.

Breakthrough in US, EU

According to the Directorate of Fisheries (Ministry of Agriculture and Rural Development), despite difficulties due to Covid-19, disrupted supply chains, and production and exports coming to a standstill, the shrimp harvest still reached 970,000 tons in 2021, up 4.3% year on year.

Vietnam’s shrimp exports grew in most markets, bringing export turnover to $3.9 billion, up 4% over 2020. In particular, exports to the US and EU markets experienced a breakthrough. Specifically, by the end of November, shrimp exports to the US hit $983.5 million, up 22% year on year. At the same time, shrimp exports to the EU increased by 16% to $548 million, accounting for 15.4% of total exports.

According to the Vietnam Association of Seafood Exporters and Producers (VASEP), when the pandemic is under control, and the US and EU markets revive, plus benefits from new-generation free trade agreements (FTAs), Vietnam’s shrimp processing enterprises will seize the golden opportunity to boost exports.

Currently, the five largest markets for Vietnamese shrimp include the US, Japan, the EU, China, and South Korea, accounting for 80-85% of Vietnam's shrimp export value. VASEP forecasts that in 2022, shrimp exports will increase by about 10%, reaching export turnover of $4.3 billion.

Vo Van Chieu, director of the Department of Industry and Trade of Soc Trang province, said that Soc Trang’s shrimp export turnover in 2021 was over $1 billion, up nearly 23% compared to 2020. This is the second consecutive year that Soc Trang topped the country in terms of shrimp exports.

Ca Mau province said that shrimp has become the "billion dollar" export item of this province, with over $1.1 billion in 2021.

Weaknesses revealed

According to Le Ba Anh, Deputy Director of the Department of Quality Management of Agro-Forestry Products (Ministry of Agriculture and Rural Development), the use of banned chemicals and antibiotics in the shrimp farming process has been detected. As a result, several shrimp batches of Vietnam were warned for residues of chemical, antibiotics, heavy metals or infection with pathogenic microorganisms in 2021.

Le Van Quang, General Director of Minh Phu Seafood Corporation, pointed out that, in the past 20 years, despite achieving remarkable results, due to rapid development, heavy consequences on the environment and society have occurred.

In the Mekong Delta, shrimp breeding has developed well. The production cost of shrimp, thus, is high, making it less competitive.

He said that in Ecuador, the shrimp farming area is only 250,000 hectares, but the output is equivalent to Vietnam, which has 740,000 hectares. In 2021, the country's shrimp production is estimated at 940,000 tons, compared to Vietnam's 970,000 tons. Their production cost is only 1/2-1/3 that of Vietnam.

For India, shrimp output in 2021 is estimated to be 700,000 tons, an increase of 6.1%. Its production cost of shrimp farming is 20-30% lower than that of Vietnam.

Fortunately, the Vietnamese shrimp industry has the world's leading processing technology with many high-value-added products such as high-end and instant products, so shrimp exports still achieve good results.

However, Quang believes that this advantage of Vietnamese shrimp will gradually disappear in the next 3-5 years. Because of the Covid-19 pandemic, Ecuador could not sell in-whole shrimp to China, forcing them to switch to processed goods with supportive policies of the Government. India also increased the proportion of value-added goods in the past 2-3 years.

"If Vietnam does not have an effective solution, only 5-10 years from now, the Vietnamese shrimp industry will not be able to compete in the world and enter a downward period," he said.

Before 2015, Vietnam used to be the world's largest shrimp exporter, but the acceleration of India since 2015 and the breakthrough of Ecuador since 2018 have pushed Vietnam's shrimp exports down to the third position.

White-leg shrimp is growing strongly and accounts for a large proportion of Vietnam's total shrimp exports. Meanwhile, export turnover from black tiger shrimp has continuously decreased from 32.6% to 15.4%.

In the picture of the world's seafood imports, shrimp still accounts for the highest proportion in value with 14% and had a growth rate of 21% in the period 2016-2021. The world’s shrimp import value ranges from $22–28 billion/year.

The demand for shrimp in the world market is increasingly strong, attracting not only Vietnamese exporters but also exporters from many other countries. Therefore, along with an optimistic signal about demand, competitive pressure is also on the rise.

According to 2020 data, Vietnam ranked third in the world for shrimp exports, accounting for 13.6% of the market share, after India (15.7%) and Ecuador (14%).

Change to return to the world’s No. 1 position

According to the plan set by the Ministry of Agriculture and Rural Development in 2017, in the period of 2021-2025, Vietnam will form a high-tech shrimp industry and large-scale ecological farming with organized and systematic production, with infrastructure and technical services invested effectively and sustainably; total export turnover to reach $10 billion, the average growth rate to be 12-14%/year; the total area of brackish water shrimp farming to be 750,000 hectares, with an output of 1.1 million tons. Vietnamese shrimp would return to the world’s number one position.

In order to complete this plan, Mr. Le Van Quang said that it is necessary to re-plan the shrimp value chain in the direction of adapting to climate change, to the circular economy and green economy, based on a digital platform, linking value chains to ensure profits for all participating partners as well as livelihoods of people.

According to Deputy Minister of Agriculture and Rural Development Phung Duc Tien, Vietnam has joined 16 new-generation Free Trade Agreements (FTAs). This is a favorable opportunity to improve the capacity of production organization to ensure supply chains and traceability of origin.

Tam An

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