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A new turning-point for Vietnam’s aqua-products sector

As soon as the pandemic of COVID-19 calmed down, the aqua-products import - export sector is making a quick recovery in order to reach the target of achieving an export turn-over of USD 8.6bnalmost equal to that of 2019. With advantages from the Europe - Vietnam Free Trade Agreement (EVFTA) when it comes into effect, Vietnam’s aqua-products sector expects to achieve a new stature in the global import - export trade.

With advantages from the Europe - Vietnam Free Trade Agreement (EVFTA) when it comes into effect, Vietnam’s aqua-products sector expects to achieve a new stature in the global import - export trade

There have been many tie-knots…

According to reports from Vietnam Association of Seafood Exporters and Producers (VASEP), aqua-products export nationwide in the first four months of 2020 reached USD 2.23bn- a decrease of 8% year-over-year compared to 2019: catfish export decreased the most, -26%; squid and octopus decreased -22%; tuna, -14%; shrimped increased only 2.4% compared to those of 2019 due to the pandemic of COVID-19.

The pandemic of COVID-19 showed the weakness of the aquaculture sector: the post- harvest storage. Cargo congestions at border gates without having systems of cold-storage bonded warehouses assisting importexports; enterprises have not enough storage for cargo and material; existing mechanisms and policies for investing storage warehouses are complicated and even when the investment is approved, incentive interest in a little bit lower than interest of medium-term loans, so that enterprises are not into the field.

There have been many tie-knots…

Besides, production scale is not equivalent to the existing potential. The aqua-products import- export sector is one with the great number of enterprises with about 700 factories closely connecting to lives of millions of Vietnam farmers and fishermen nationwide. However, the factories are only small and medium sized. All Vietnam’s key products are losing their advantages in global markets when many countries as India an Ecuador are pushing up shrimp material farming to provide international markets. At the same time, China has expanded their fish farming areas and exported products, increasing competition threats to Vietnam’s catfish…Vietnam’s aqua products material price are 10%- 20% higher than those from countries as India and Thailand.

Besides, there are a number of matters that bring difficulties to the sector as improper mechanisms, infrastructure system, asynchronous and outdated technology, shortage of capital being invested in infrastructures, inefficient production, low quality and low value added… The work of protecting aqua products has not been paid much attention to. And aqua products development policies are not very effective. There are still illegal fishing in foreign territorial waters.

Catch opportunities of exporting aqua-products

EVFTA is expected to come into effect at the beginning of the coming August. A number of aqua products are expected to have new booming up in the EU market.

Most of shrimp material imported to the EU will enjoy the decrease of basic tax from 12% - 20% to 0% when the agreement comes into effect, import tax on processed shrimp will be 0% after 7 years. Import tax on catfish will decrease from the existing 5.5% to 0% in three years with frozen fish fillet and from 7% to 0% in 7 years with processed fish fillet. On canned tuna and fish balls, EU offered Vietnam tariff quotas of 11,500 tons and 500 tons respectively. Besides, other products on basic taxes of 6%- 8% as squid and frozen octopus will decrease to 0%, other products as surimi will decrease from 14.2% to 0%; swordfish from 7.5% to 0%...

Most of shrimp material imported to the EU will enjoy the decrease of basic tax from 12%- 20% to 0% when the agreement comes into effect, import tax on processed shrimp will be 0% after 7 years. Import tax on catfish will decrease from the existing 5.5% to 0% in three years with frozen fish fillet and from 7% to 0% in 7 years with processed fish fillet…

To make use of advantages from EVFTA, export enterprises should have long-term vision and strategies to deal with strict principals in the EU market- the most hard-to-please market in the world. Cooperation among farming, processing and delivering is of importance. This helps enterprises to have supply sources, quality-ensured materials, so that they are able to track product origin and have stable goods- consuming channel as well.

Main competitor countries as India and Ecuador are having difficulties from the disease isolation, their production and export greatly decreased around 50%; Indonesia, the Philippines, and Thailand will have a decrease of 30% on production amount and export. They have later recovery compared to Vietnam in term of maintaining sources of providing aqua-products. This will be a chance for Vietnam’s aqua-products sector, if they can catch.

And Vietnam’s aqua products enterprises have conditions to be active in their productions for their supply chains of essential materials for farming and aqua-products processing, their aquaproducts assisting sectors (medicines, chemicals, packages, equipment and tools) do not depend on foreign makets.

Demands for seafood in countries as China, Korea and Japan are decreasing in the coming time; EU and the U.S will have high demands on canned food. Therefore, enterprises should focus on canned food and processed food with suitable price and packaging for retail section in countries having impacts from the pandemic as the EU, Japan, Korea, and China.

Vietnam’s aqua products sector will have opportunities to expand their export markets, to increase their competition abilities, to attract foreign investments and to modernize processing technology and to improve product quality. However, the sector should have attempts to remove ‘yellow tickets” to Vietnam’s exploited products. This is a prerequisite for stable developments of the sector.

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