Seafood Export to EU: Exporters Must Satisfy Food Safety Standards

Mr Truong Dinh Hoe, General Secretary of the Association of Seafood Exporters and Producers (VASEP), said: In 2007, the EU surpassed Japan to become the biggest importer of Vietnamese seafood. Since then, its importation has increased rapidly and stably. In 2011, the EU was the biggest importer of Vietnamese seafood with 21.8 percent of shipments, followed by the United States with 19.3 percent and Japan with 16.4 percent. Vietnam supplies a wide range of seafood for the EU market, with the largest product being tra fish (pangasius). However, the global economic crisis plus unfair smearing campaigns that aimed at damaging the reputation of Vietnamese seafood in Italy, Spain and Egypt caused Vietnam's catfish exportation to the EU to decline in recent years (dropping more than 1 percent in 2011). Luckily, shrimp export to the EU has soared and is expected to grow strongly in the coming years. In 2011, shrimp export to this market expanded 20.3 percent over 2010, making Vietnam the 5th largest shrimp exporter to the EU, with a market share rising from 6.1 percent in 2010 to 7.5 percent in 2011.

 

In the first three months of 2012, Vietnam raked in US$1.3 billion from seafood export. The EU was the biggest importer with US$260 million. Mr Hoe said Vietnam’s seafood quickly secures a strong footing in the EU market because the country has a lot of advantages, particularly processing capacity. It now has 539 processing plants meeting national food safety requirements and 393 facilities certified for export to the EU, which can process 7,500 metric tonnes of frozen food a day. So far, 49 processing plants were certified GlobalGAP (45 percent of tra catfish facilities); 103 tra catfish farms were applied other safety standards; and five farms approached ASC certificates.

 

Another advantage for Vietnam is abundant supply. In 2011, aquatic output reached 2.93 million tonnes, up 7.4 percent over 2010. Particularly, the country harvested 632,900 tonnes of shrimp and 1,195,344 tonnes of tra fish. The quick shifting from white-legged shrimp farming to smaller-sized species is offsetting prawn shortage caused by diseases and extreme weather. White-legged shrimp accounted for 29.3 percent (compared with 26 percent in 2010), black tiger shrimp made up 59.7 percent; and blue-legged prawn and other species took up more than 10 percent.

 

Mr Struan Stevenson, Senior Vice President of the European Parliament’s Fisheries Committee, said: Tra and basa catfish is an advantage for the Vietnamese seafood industry. Hence, boosting export of these two products to the EU market is the right strategic direction. Despite facing challenges, especially technical barriers to trade, in 2011, Vietnam shipped over 600,000 tonnes of tra and basa catfish to the EU. From this impressive figure plus steady growth in the face of challenges, it is certain that Vietnam's fisheries sector has succeeded in establishing a foothold in the EU market and is trusted by investors there.

 

Although Vietnam’s seafood has strong footing in the EU market, the intense public debt crisis forces the EU to raise barriers to imports, including Vietnam’s seafood.

 

Mr Hoe said the weakest point of the Vietnamese seafood industry is the lack of a consistent and long-term marketing strategy. Although Vietnam is the fifth largest seafood supplier in the world, it does not have a long-term global marketing strategy. It lacks a good official information system to respond to distorted information about Vietnam’s products, in the EU in particular and the world as a whole.

 

Moreover, more than 70 percent of Vietnam’s exports are not fully processed. As for tra fish, over 80 percent comes in the form of frozen fillet. As a result, Vietnam’s products have not been able to approach high-grade segments in the EU - a potential market for instant foods (the EU spends US$3 billion on raw seafood and US$1.6 billion on processed seafood.) Vietnam is quite successful in exporting high-grade shrimp to Japan, but this product has not deeply penetrated into the EU market. Without enough capital and long-term export orientation, Vietnamese enterprises are not interested in developing value-added products.

 

Importing markets require traceable proof of product origin. Vietnam is seeing positive progress in processing plants. However, in this regard, Vietnam confronts numerous limitations, mainly because of small shrimp farms where traceability is very costly. This is a reason why Vietnamese shrimp has difficulty penetrating the EU. And, only financially strong companies can invest in value chains.

 

Apart from above-mentioned weaknesses like marketing strategy, national branding and traceability, trade barriers are also a major concern for the Vietnamese fisheries sector, with growing competition today. Nontariff barriers to Vietnam's exports in the EU are safeguard measures, mainly antidumping measures, sanitary and phytosanitary measures (SPS), and technical barriers to trade (TBT). TBT is always a daunting challenge for Vietnamese seafood exporters. Nguyen Thi Thu Sac, Vice Chairwoman of VASEP, said: Although the EU recognised that National Agro Forestry Fisheries Quality Assurance Department (Nafiqad) was qualified for examining the food safety of exports to the EU, if a batch of seafood shipments is found disqualified for use in the EU, it will be immediately returned. Therefore, Vietnamese businesses have to meet food safety standards.