World Seafood Shanghai Exhibition (SIFSE) 2020
15th Shanghai International Fisheries and Seafood Exhibition
15th Shanghai International Aquaculture Exhibition
26-28 August 2020 • Shanghai New International Expo Center, China
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Industry news

Covid-19: Opportunities and challenges for Vietnam's seafood industry

Datetime:2020-05-08

By Le Han


Vasep, the Vietnam Association of Seafood Exporters and Producers, reports  that in the first quarter of 2020, the outbreak of Covid-19 broke out strongly around the world, especially the countries that are importing a lot of Vietnamese seafood, resulting in a 10% decrease in the country's seafood export results compared to the previous year. The same period of 2019 reached US $ 1.62 billion. However, the Covid-19 epidemic is and will be creating new trends in the seafood supply chain, which can be seen as new opportunities and challenges for Vietnam's fisheries sector


The most affected markets include China, down 27%, EU down 16%, South Korea 11% and ASEAN down nearly 7%. The trend of the world consumer market changed due to the impact of the Covid epidemic, the ban, blockade orders of many countries and the fear of consumers, causing the demand in the food service segment to drop sharply. .

Income of consumers has decreased, so the consumption of high-class products tends to decrease, the impact of the average price reduction of fishery products exports. decreased by -24%, tuna decreased by -10% while shrimp exports still maintained a slight increase of 1.8%.


The Covid-19 epidemic caused a series of disturbances in the seafood value chain. The supply chain of raw materials and finished products has been "broken", orders have dropped, shipping activities, freight transportation have been delayed, congested at ports, goods flows and cash flows are in shortage or Congestion / inventory in the context of businesses must maximize social responsibility with the chain and with employees, causing businesses to face many difficulties and major pressures during the Covid-19 epidemic.  

However, the Covid-19 epidemic is and will be creating new trends in the seafood supply chain, which can be seen as new opportunities and challenges for Vietnam's fisheries sector. 


New challenge in fisheries sector due to the impact of Covid epidemic - 19

Purchasing power from markets decreased and recovered "cautiously":

- There will be some businesses get eliminated: shut down / go bankrupt or sell to other investors.

- NPLs may increase, affecting both related industries (insurance, banking, supporting industries such as manufacturing of medicines, chemicals, packaging materials, etc.)

- Production costs increase.

- The situation of hanging up the pond on a small scale makes the material more shortage in the future and the material price will increase.

- Supply chain interrupted

- Increasing inventories and shortage of cold storage.

- Labor will be lacking and increasingly difficult.


Opportunities of the fisheries industry to adapt, recover and develop in the coming period:

- Confidence of investors with Vietnam and with Vietnam's seafood has increased significantly today and after the Covid epidemic (policy decisions and guidelines against effective epidemics, social security and economic development).

- Countries competing with Vietnam, such as India and Ecuador, must blockade against epidemics, significantly reducing up to 50% of production and export; Indonesia or the Philippines and Thailand also dropped about 30%. These countries will have significant latency than Vietnam in restoring production to maintain the supply to the world. This is a great opportunity for Vietnamese seafood.

- There will be a shift in production from China to Vietnam, especially after the US-China trade war and the Covid -19 epidemic.

- The demand for raw materials from preliminary processing from Vietnam tends to increase.

- Convenience fishery products (RTC and RTE) with added value tend to be preferred in the world market.

- Supporting industries for aquaculture ( producing medicine, chemicals, packaging materials, equipment, tools for aquaculture, processing, ...)  have opportunities to develop in Vietnam, thereby creating favorable conditions for seafood businesses to be more active in production


Forecast

Covid's disease situation is still very complicated in countries around the world, so, in the next few months, the export situation will certainly continue to be affected by reduction. Enterprises have not been able to escape the situation of declining, delaying / canceling orders, transporting difficult goods, and payment is not favorable.

Seafood exports in April and the second quarter will not be able to recover because some markets are still strongly affected by the covid epidemic, especially the EU market. Export to China also could not recover like before the outbreak. Countries in the epidemic center may relax the blockade, but the transactions will not be smooth and recover immediately.

Forecasting the export of aquatic products in the second quarter will continue to decrease slightly by 5% compared to the same period last year, reaching US $ 2.0 billion, then recover gradually in the third and fourth quarters, the whole year 2020 results will reach 8.26 -8.30 billion USD, down 3.8% compared to 2019.



News source: FIS.com

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