Opening Market Leverages Pangasius Exports

9:25:37 AM | 6/14/2022

Pangasius exports posted strong growth in export price and volume. The price of pangasius exported to the United States reached an all-time high of US$4.5 per kilogram.

After strong impacts caused by the COVID-19 pandemic, pangasius producers have gradually recovered to speed up trade to pre-pandemic levels since October 2021.

Aquatic exports rose 42% year on year to US$4.6 billion in the first five months of 2022, according to the Vietnam Association of Seafood Exporters and Producers (VASEP). Many exports extended positive growth, with pangasius exports estimated to exceed US$1.1 billion, which was 97% more than the same period in 2021.

Major traditional markets, especially the US, are always a top priority. Stateside pangasius exports were estimated at US$243 million in the first five months of 2022, up more than 130% year on year. As the US Food Safety and Inspection Service (FSIS), Department of Agriculture, recently recognized six more factories qualified to make products for the US market, pangasius exports to the US are forecast to continue growth in the near future. FSIS has now recognized 19 factories in this list.

Pangasius exports to the EU also prospered again after more than three dismal years. In the year to mid-May, the total export value of frozen pangasius to this market was nearly US$77 million, up 95% year on year. The Netherlands was the biggest importer, accounting for 32% of Vietnam's pangasius exports to the EU.

In the first five months of 2022, Vietnam's seafood exports to China jumped more than 117% on year. Pangasius exports to Thailand also approximated US$50 million, representing a year-on-year growth of 80%. Some new markets such as Egypt expanded by 85% from a year earlier, although the value was just more than US$15 million. These positive signs showed that the above markets are consuming Vietnamese pangasius products very well. The expansion of new markets has helped businesses to reduce dependence on traditional markets and expand and promote the image of the pangasius brand more broadly.

From now till the end of this year, pangasius exports to major markets such as the US and the EU are projected to be positive because the export price from domestic processors is competitive. In addition, in major markets such as the US, pangasius inventories are already at a very low level after two years of the epidemic, which has caused US importers to increase pangasius imports to meet the increasing market demand.

Besides, pangasius processors and exporters are actively expanding exports to potential markets. Among them, Mexico, Egypt and Thailand are notable markets. Given the high demand, domestic firms can easily access new markets and more companies start to join exporting. Mexico is currently the biggest importer in the CPTPP. In the first five months of 2022, the total value of pangasius exports to Mexico exceeded US$50 million, up nearly 70% year on year.

Pangasius exports to major markets such as the US and EU are forecast to continue high growth in the coming time. In particular, Europe is witnessing strong demand growth to fill the gap in some segments of white fish such as cod and pollock that are in short supply from Russia.

Domestic seafood companies will continue to benefit from exports but will face a lot of difficulties in input supply sources and logistics costs which are currently increasing very rapidly and affecting their profit margins in the last quarters of the year.

As for the Chinese market, some Vietnamese seafood exporters have been temporarily suspended for export by Chinese authorities, owing to detection of the SARS-CoV-2 virus on the packaging of pangasius products, thus hurting exporters to this market. As domestic companies have met quarantine requirements and Vietnam already achieved herd immunity, exports to China are forecast to be positive and easier in the coming time.

By Huong Ly, Vietnam Business Forum