Seafood Exports Face Barriers

11:14:03 AM | 13/6/2019

Vietnam’s seafood industry is facing some obstacles from trade barriers and prolonged hot weather, resulting in a slight decline in seafood exports in the first five months of 2019.

The Ministry of Industry and Trade said the five-month seafood decreased by 1.82% in volume to 748,200 tons worth US$3.173 billion, down 1% year on year. Pangasius shipments are expected to grow to the United States, Japan and ASEAN but shrink to the Chinese market in the coming time.

The ministry’s data showed that nearly 150 trade defense cases against Vietnamese exports have been filed in 18 countries and territories so far. The United States topped the list with 27 cases, or 20% of total lawsuits.

In China, 33 seafood products are exempted from import duty, including lobster, tiger prawn, sea shrimp, cod, clam, frozen pangasius, basa fish, spiny mackerel, ocean tuna and octopus - strong exports of Vietnam. Currently, more than 150 Vietnamese companies are exporting seafood to China, including 45 pangasius exporters and nearly 50 shrimp exporters.

But, this market is increasingly demanding more about quality and origin of products. China invested to construct and upgrade large-scale modern quality testing and quarantine labs in border areas which are reportedly not inferior to facilities installed in developed countries like the United States, Japan and the European Union (EU).

As planned, from October 1, 2019, food shipments imported into China must have export certificates. Therefore, exporters need to pay attention to their production and export conditions, particularly new requirements for quality and traceability as well as regulations and standards on packaging, labeling and regional barcodes for sustainable export and higher product value.

Shrimp exports will continue to face hardships as a result of intense competition in the market and prices will continue to be low. Since early 2019, given favorable weather, shrimp supplies from major producers like India, Ecuador and Indonesia has increased from a year earlier. From June 2019, global shrimp supplies will increase sharply because of major harvests in Vietnam, Thailand and China. Therefore, shrimp prices are expected to be still low.

According to the Vietnam Association of Seafood Exporters and Producers (VASEP), pangasius exports to the United States are forecast to further decline in the second quarter of this year. Previously, due to pending review of export value-added tax decision, stateside shipments tumbled 22.8% in February and 44.4% in March from the same periods of 2018.

Since 2016, exports to the U.S. market have been more difficult. The U.S. Food and Drug Administration (FDA) changed regulations on food safety. Accordingly, foreign companies wishing to export to the US market must have legal entities or legal representatives in the U.S. licensed by the U.S. Government. Only with this regulation, nearly 800 Vietnamese companies, which have exported to the U.S. for many years, are excluded from this market.

Barriers to food safety and hygiene, packaging specifications and especially traceability of products become more stringent, making small businesses unable to meet new requirements. Taking regulations on traceability of products as example, products must be traceable from input materials to processing, transporting, importing across border gates and being sold to consumers.

Recently, the U.S. Department of Commerce (DOC) issued the final conclusion on the 14th period of review (POR14) of anti-dumping tax on Vietnamese pangasius products exported to the United States. According to the POR14 result, Vietnamese pangasius may bear up to US$3.87 per kilo. This final tax rate is higher than the preliminary result published in September 2018. Currently, the Ministry of Industry and Trade recommended Vietnamese exporters continue to fully cooperate with the DOC in subsequent reviews to obtain best results.

Huong Ly