In the context of seafood exports being passive due to a decrease in orders from many markets, the reopening of China is a catalyst for this industry in 2023.

Source: Internet
Increasing deep processing
In 2022, Vietnam's seafood industry had a remarkable year of recovery and growth, despite many fluctuations in the second half of the year.
Vietnam's seafood export had reached the target of US$ 1 billion, up 25% compared to 2021. This is the record level of Vietnam's seafood industry in more than 20 years of exporting to the world market. However, in the face of market fluctuations, the strategy of the seafood industry in 2023 will gradually shift from exploitation and fishing to farming and deep processing to maintain sustainable growth. In 2023, the seafood industry sets a target of export turnover of about US$ 10 billion, with a total output of about 8.74 million tons, equaling 96.7% of the estimated implementation in 2022. Exploiting about 3.58 million tons, and farming 5.16 million tons.
In the context of difficulties lasting from the last months of 2022, Vietnamese exporters also face challenges such as currency fluctuations, especially debts payable in USD and competitive pressure from rival suppliers - especially shrimp exporters. With substitute products at more reasonable prices, consumers will reduce spending in the face of inflationary pressure, and pangasius exports maintain a better growth momentum than shrimp exports.
In a recent report, the Center for Analysis and Investment Consulting of SSI Securities Joint Stock Company said that in 2023, inflation would continue to be a challenge for the seafood industry in the context of slow-rotating inventories.
Although major seasonal events are coming, these events will not reduce inventories that are already high. SSI forecast the inventory would be fully cleared in the third quarter of 2023, with orders beginning to be received at this point.
In order to export seafood to reduce dependence on frozen products, the Ministry of Agriculture and Rural Development required that enterprises should increase the deep processing of seafood associated with export, which would be a strategic solution. Deputy Minister of Agriculture and Rural Development Phung Duc Tien said that with the current difficulties and challenges in some export markets, the seafood industry should focus on solutions, in which, strengthening deep processing; the source of raw materials must be traceable; promoting trade flexibly with markets through 17 new generation FTAs.
Expectations of the Chinese market
China's reopening is a catalyst for the industry in 2023. Although more time is needed to assess the quantitative impact of China's reopening on pangasius exports, this will make beneficial to the industry's revenue because China is Vietnam's largest pangasius export market. According to Mr. Truong Dinh Hoe, General Secretary of VASEP, Vietnamese seafood had gained market share in provinces with large consumption such as Shandong, Shanghai, Liaoning, Fujian, Beijing and Tianjin. These localities accounted for 87% of China's total seafood import turnover. In Shandong province alone, this province imported US$4 billion of seafood a year. According to Mr. Hoe, in order to increase exports to China, it was necessary to have specific measures to market to the Chinese market more effectively than now. In which, setting up a direct selling agency for Vietnamese people. However, it was necessary to consider which location was suitable.
China is a sensitive market for price and the average selling price to this market is always about 40% lower than the average selling price to the US market. SSI Research believed that revenue from the Chinese market would partially offset the decline in revenue from the US and EU, but not enough to provide a chance for companies to recover profits in the first half of 2023.
SSI experts commented: “We remain concerned about the level of uncertainty surrounding China's reopening policies. However, for now, we forecast pangasius companies' profits to decline in 2023.”
(VCN)
Read more: Seafood Industry Report
Comments