작성일자: 2014.10.10

작성자: 하노이 무역관 Nguyen Quynh Chi(Nq.chi@kotra-hanoi.org.vn)

 

 

1. Vietnam Fishery Industry Overview

 

□ Supply – Demand Overview

 

 ○ Production Situation

  - According to the General Statistics Office, in 2013, the total output of aquatic products of Vietnam reached 5,918.6 thousand tons, up 3.2% compared to 2012, of which, fishing capturing volume reached 2,709 thousand tons and aquaculture volume reached 3,210 thousand tons, up 3.3%, respectively, and 3.2% over the same period.

 

Aquatic Catch and Aquaculture of Vietnam from 2004 - 2013

Source: Directorate of Fishery

 

  - Over the past 10 years (from 2004 to 2013), Vietnam seafood production tends to keep growing with the stable growth rate over the years. By calculated, the growth rate in the average yield on a stage full of nearly 7.6%/year, of which the last 5 years (2009-2013) recorded a slower rate, only 5.2%/year. Based on volume, aquatic production from 2008 to 2013 has increased significantly with 200 thousand tons/year.

 

          Source: General Department of Statistics

 

  - In recent years, fishing operations have been taken place regularly and favorably, thus fishing volume has been in annually relatively stable growth. In 2013, maritime insecurity, remarkably the dispute between Vietnam and China, and rising cost of gasoline has continued to bring certain difficulties for fishing activities of Vietnam. Northern fishing season should be a greater impact and low yield of extraction is mainly based on the volume growth for the year.

  - According to the General Statistics Office, in 2013 fishing volume reached 2,709 thousand tones, rose by 3.3% compared with 2012, of which, the sea exploitation got 2519 thousand tons, up 3.5% over 2012. Fisheries catches of tuna in 2013 decreased sharply, with 13 thousand tons, down 15% compared with the previous year, mainly due to decreased quality of fish compared with the exports standard made the price plummet, thus many professional fishermen narrowed the fishing scale.

 

Fishery exploitation output by sector (Thousand tons)

Source: General Department of Statistics

 

Fishery exploitation output by locality (Thoundsand tons)

        Source: General Department of Statistics

 

 

  - Aquaculture activities increased rapidly in recent years, contributing significantly to the growth rate of total fishery production. Specifically, from 1,004 thousand tons in 2003 (the first year of aquaculture production milestone of 1 million tons of rolled), aquaculture production has increased more than triple, reached to 3,210 thousand tons in 2013. Averagely, aquaculture production increases by 13.2% annually from 2003 to 2013. However, for 4 recent years, two key areas of farming shrimp and Catfish have gotten difficulties due to the disease (of shrimp) and market volatility (of catfish). That made the growth rate of aquaculture production get slowdown during the period 2009 - 2013, only at the rate from 3.2% - 7.5%.

  - Catfish output in 2013 was estimated at 1,170 thousand tons, down 6% compared with 2012. The output fell because catfish producers got in trouble for a long time due to reduce of catfish material while input costs increase. However, the catfish farming has been strongly shifted towards increasing the farming area in the enterprise sector and reducing farming area in the household sector. The area of catfish farming of enterprises in some local provinces as follows: Ben Tre 1,823 hectares, up 50% over the previous year; Dong Thap 1,080 hectares, up 20%; An Giang 538 hectares, up 70%; TienGiang 127 hectares, up 40%. Many catfish farms are gradually improving technical processes following by aquaculture safety standards in order to ensure the quality and enhance the value of exports. Farming fish and other aquatic species has expanded rapidly; focusing on specialty species of high economic value, serve the needs of consumers in countries such as red tilapia, tilapia, black carp, alligator, turtle, clams, etc.

  - To the shrimp farming, the volume reached 704 thousand tons, increased by 11.7% compared to 2012. The farming area of white (vanamein) shrimp tends to expand instead of the black tiger shrimp’s farming area because black tiger shrimp farming has advantage of high productivity, while short farming time and less prone to the disease. In 2013, the area to culture white shrimp is 65.2 thousand hectares, nearly double increase than the previous year; the volume reached 230 thousand tons, rose by 56.5%.

 

 

  - Aquaculture area in Vietnam continues to expand, and has increased from 865.4 ha in 2003 to 1,038.9㏊ in 2012. The most important and largest region is the Mekong Delta. Production and export activities of the fishery industry in Vietnam are distributed along the country with the diversity of aquatic species. It can be divided into 5 major producing regions:

   · North - Central coastal area (6 provinces): Central Vietnam has 6 provinces with more than 600㎞ of coastal line from ThanhHoa to ThuaThien Hue province. The region focused on brackish water and marine aquaculture with many major species such as shrimp, oysters, abalone, grouper, and snapper.

   · South central coastal area (8 provinces): The Southern Central coastal has about a coastline of 600㎞ from Danang to BinhThuan. The region has considerable climatic and geographical advantages for brackish water and marine aquaculture, while freshwater aquaculture only plays a minor role. The largest lobster producers are located in this region

   · Southern sea-tern region (6 provinces): Southern sea-tern region includes 6 provinces from BinhPhuoc to Ho Chi Minh city. Aquaculture development in this region is very diverse and expanding. Mollusk farming, shrimp culture, lobster and marine fish farming are important aquaculture activities in this region. Brackish water and freshwater fish farming make up less than 10% of total.

   · Mekong Delta (13 provinces): the Mekong Delta provinces from Long An to Ca Mau contribute the largest volume and value to Vietnam’s aquaculture production. Aquaculture in this area has diverse activities: fresh water, brackish water and marine water. It includes breeding, rearing and sale of shrimp, prawn, mollusk and fig fry and fingerlings. Especially, Mekong delta is suitable for raising shrimp due to the characteristic of geological structure with salinity area accounting for 46.15% area of the whole region. Area for fresh water aquaculture is more than 400,000㏊.

   · Inland Area (31 provinces): It include the Red River Delta, midland and mountain north and highland, which have the system of rivers, cannas rather dense and favorable conditions for the fresh water aquaculture such as catfish, tilapia, craps, etc.

 

Water surface area for aquaculture in Vietnam by local (thousand ㏊)

       Source: General Department of Statistics

 

 ○ Consumption Demand

  - According to, "the master plan to develop Vietnam's fisheries sector in 2020, Vision 2030" of the of Fisheries Economics Planning Institute (General Directorate of Fisheries, 2013), the supply and demand situation of fisheries in some in recent years in the domestic production is insufficient to meet the total demand (including domestic consumption and export), so Vietnam has to import seafood materials from outside. Meanwhile, total demand for processed seafood exports was at 3.73 million tons (in 2010), the demand for fresh local seafood of 1.8 million tons. Domestic production can meet the 3.8 million tons, so it was still a shortage of half a million tons, this shortfall was imported from other countries in the ASEAN region, mainly shrimp, cold-water fish, squid, octopus.

  - With the population of more than 90 million, the domestic market is potential. However, the domestic market accounts for a small proportion of seafood consumption. According to Directorate of Fishery’s report, consumption volume of domestic processed products is approximately haft of export volume; however, its value is only 9% of export value. In term of the seafood business’ revenue, the revenue from domestic market is very low (less than 5%). This is due to almost kind of fresh water fish are consumed in domestic market, while the strength of most business is frozen products for export. The selling amount of frozen products and canned products is quite modest (5-10%). The reason is the Vietnamese consumption habit, Vietnamese prefers fresh products than frozen products while the domestic seafood companies mainly provide the frozen products.

 

Domestic consumption of processed seafood

       Source: General Department of Statistics

 

  - Local demand for fish and other seafood is expected to increase rapidly overtime due to growth of population from 90.7 million to 97.7 million (annualized rate of 0.8% from 2013-2022) and increase the real income (GDP per capital forecasted to increase by 11.8% per year. The value of domestic fishery consumption is estimated to increase 5.37% per year, Level of domestic consumption in 2015 is forecasted 790 thousand tons, and 2020 940 thousand tons, of which frozen product would account for over 30%.

 

 

□ Import – Export Trend

 

 ○ Export

  - Fishery is one of the major export items of the country.  Currently, more than 95% of Vietnam seafood products are consumed in foreign market. Vietnam currently exports seafood to more than 185 countries and territories over the world.

  - Over the last decade, seafood exports Vietnam have constantly expanded and gotten more strong strides. In 2002, seafood exports reached $ 2.02 billion; by 2012 the number had increased more than 3 times, reached to over $ 6 billion. In the period from 2003-2012, the growth rate of seafood exports of Vietnam averagely was 12%/year, and  5 years from 2008 to 2012, of 10.6%/year .

 

            Source: Directorate of Fishery

 

  - To the almost of economic industries, 2013 was a difficult year but exports of seafood from Vietnam also successfully completed the yearly plan. Particularly, export volume reached $ 1.6 million, a turnover of 6.72 billion dollars, an increase of 9.2% in volume and 10.3% in value compared with 2012.

 

Aquatic Export of Vietnam in 2013

       Source: Trade Info – Ministry of Industry and Trade

 

  - Top 10 largest seafood export markets of Vietnam in 2013 include the United States, EU, Japan, Korea, China, ASEAN, Australia, Canada, Taiwan and Hong Kong; of which South Korean market recorded a reduce in volume and Hong Kong fell slightly in both volume and value; the rest of export markets of Vietnam earned a significant growth, and the strongest is from the Chinese market.

  - The structure of exports of fishery products in 2013 was shifted to 2 large items as frozen fish and frozen shrimp.

  - The average export price of fishery products in 2013 were down slightly compared to 2012, except frozen shrimp price increased due to the low supply from the world

  - After the top 10 major markets, seafood exporters in Vietnam in 2013 increasingly tend to the promising market growth with impressive rate such as Brazil, Israel, Libya, Afghanistan, Norway, in contract some market shave the down trend such as Egypt, Ukraine, Jordan, Peru, Iraq, Costa Rica, Serbia, Nigeria, Chile compared to 2012.

  - For the vast consumer market and wealth, the United States is currently the largest importer of seafood of Vietnam and has provided many potential export opportunities for Vietnam seafood industry. Seafood exports from Vietnam to the United States in 2013 reached 240.2 thousand tons with a turnover of 1.49 billion dollars, up 19.4% in volume and 27.2% in value compared to 2012, that continues to maintain the number 1 of seafood export markets of Vietnam.

 

 

  - The structure of exports of seafood products from Vietnam to the United States in 2013 was focused mainly shrimp and catfish; and frozen shrimp got a export growth rate is very strong significantly.

  - Frozen shrimp exports of Vietnam to the United States in 2013 reached 65.06 thousand tons with a turnover of $ 823.8 million, up 60.8% in volume and 83.5% in value compared to 2012.

  - The average export price of frozen shrimp from Vietnam to the United States in 2013 reached $ 12.84/㎏, an increase of $ 1.64/㎏ compared to 2012.

  - To Pangasius (catfish), in 2013 exports of catfish from Vietnam to the United States reached 119.5 thousand tons with a turnover of $ 376.2 million, up 13.8% in volume and 4.9% in value compared to 2012.

  - The average export price of frozen fish from Vietnam to the United States in 2013 reached $ 3.25/㎏, down 0.12 USD/㎏ compared to 2012.

  - Forecast 2014:

   · Seafood consumption trends in the United States will be sized on shrimp: shrimp with size 21/25, 26/30, 31/40 and 41/50; tiger shrimp with size 16/20, 21/25, 26/30.

   · Seafood exports from Vietnam to the United States will reach 280.2 thousand tons with a turnover of 1.91 billion dollars, up 16.6% in volume and 27.6% in value compared with in 2013.

  - It was recorded a gradually positive prospect from this market in 2013. Vietnam seafood exports to this region reached 320.7 thousand tons with a turnover of $ 1.17 billion, up 4.2% in volume and 3, 5% of turnover compared to 2012.

  - Frozen Shrimp and catfish are 2 main imported commodities to the EU, but frozen shrimp exports got a growth trend, meanwhile catfish was reduced in export value compared with 2012.

  - Frozen shrimp: frozen shrimp exports of Vietnam to the EU in 2013 reached 40.4 thousand tons with a turnover of $ 389.07 million, up 13.5% in volume and 32% in value compared with 2012.

 

 

  - EU economy has recovered favorable conditions for Vietnam shrimp for further growth to the region. In 2014, the trend of shrimp consumed by the EU will focus on categories such as shrimp with size 26/30, 31/40, 41/50; tiger shrimp with size 8/12, 16/20 and 26/30.

  - The average export price of frozen shrimp from Vietnam to the EU in 2013 reached $ 9.61/㎏, an increase of $ 1.34/㎏ compared to 2012.

  - To Pangasius, in 2013, exports of catfish from Vietnam to the EU reached 173.2 thousand tons with a turnover of $ 382.1 million, up 1.1% in volume and 10% of metal value compared with 2012.

  - The average export price of Vietnam's  fish to the EU in 2013 reached $ 2.20/㎏, down 0.26 USD/㎏ in turnover compared to 2012.

  - By forecast, from 01/01/2014, Vietnam still receives GSP (general system access tariff) from EU for seafood, thus Vietnam seafood is expected to gain continuously export advantages in EU market. In 2014, forecasted exports of seafood from Vietnam to the EU will reach 340.7 thousand tons with a turnover of $ 1.25 billion, up 6.2% in volume and 6.8% in value over the years in 2013.

  - Seafood exports from Vietnam to Japan in 2013 reached 139.8 thousand tons with a turnover of $ 1.14 billion, up 1.7% in volume and 4.6% in value compared to 2012.

 

 

  - The structure of exports of seafood products from Vietnam to Japan in 2013 focused primarily on frozen shrimp. The export volume of this commodity reached 66.1 thousand tons, turnover of $ 697.6 million, an increase of 13, 4% in volume and 15.4% in value compared with 2012, accounted for 47.3% in volume and 61.2% in value of total exports to Japan.

  - The average export price of frozen shrimp from Vietnam to Japan in 2013 reached $ 10.84/㎏, an increase of $ 0.34/㎏ compared to 2012.

  - Forecast:

   · Trends in consumption of shrimp in Japan in 2014 will focus on white shrimp with size 13/15, 16/20, 21/25 and 26/30; and Black tiger shrimp with size 21/25, 26/30, 31/40, 41/50, 51/60 and 71/90.

   · Seafood exports from Vietnam to Japan is forecasted to reach 150.2 thousand tons with a turnover of $ 1.24 billion, up 7.4% and 8.8% of turnover compared with 2013

  - Seafood exports from Vietnam to South Korea in 2013 reached 121.6 thousand tons with a turnover of 518.4 million, down 10% in volume and 1.8% increase in turnover compared to 2012.

  - Frozen shrimp is the largest export items of Vietnam to South Korea in 2013, exports grew to 25.3 thousand tons with a turnover of $ 222.3 million, up 14.7% in volume and 30.3% in value compared with 2012.

  - The average export price of frozen shrimp from Vietnam to South Korea in 2013 reached $ 9.23/㎏, an increase of $ 1.01/㎏ compared to 2012.

 

Aquatic Exports from Vietnam to Korea in 2013

 

  - In contract, some export commodities from Vietnam to Korea recorded a declined result as fish cakes fell 16.1% of volume and 18.6% of turnover; frozen octopus down 9.5% in volume and 2.2% of turnover; dried fish down 4.4% of volume and 4.2% of turnover; Dried squid decreased by 12.4% of volume and 3.5% of turnover; Frozen squid decreased 15.1% of volume and 27.3% in value compared with 2012.

  - South Korea is one of the largest import markets to Vietnam's seafood, this is a potential market of 50 million people and seafood consumption is very high. Because of stable economy and market demand, Korean seafood market is assessed potential in the world.

  - Consumption of seafood in general and frozen shrimp in particular in Korea remains stable in the near future due to the Korean people loves eating seafood and considers seafood as foods of high nutritional value. By forecast, in 2014, seafood exports from Vietnam to Korea will reach 125.2 thousand tons with a turnover of $ 550 million, up 3% in volume and 6.2% in value compared with 2013.

 

 

  - The year of 2013 is the first successful year of Vietnam's seafood exports to China, the export volume reached 79.8 thousand tons with a turnover of 437.2 million, up 48% in volume and 56.9%. In terms of metal value, frozen shrimp increased by 51.4% of volume and 67% of turnover; catfish increased by 97.3% of volume and 79.9% of turnover; fish cakes increased by 49.7% in volume and 45.4% in value compared with 2012. Three items account for 90% of total volume and 89.9% of total exports to China in 2013.

  - The main reason of this dramatic increase is the increase in the demand for shrimp in this market. Moreover, the Chinese processing factories are actively looking for input of breaded shrimp, cooked shrimp. China is in the lack of shrimp processing plant. Therefore, China will increase imports of shrimp in 2014 and become more favorable for black tiger shrimp with size 6/8 and 13/15; white shrimp with size 31/40, 41/50, 61/70 and 71/90.

  - Chinese factories are manufacturing 150000-200000 tons of catfish/year, consuming 100,000 tons of live fish. The catfish farms in China often have higher infection rates by rising high-density and lack of farming standards. The biggest challenge for China is water pollution for catfish. Thus exporting frozen fish to China will continue to grow strongly.

 

Main Export markets of Vietnam Fishery Industry in 2013

      Source: Trade Info – Ministry of Industry and Trade

 

 ○ Import

  - In 2013, total imports of seafood from Vietnam reached $ 721 million, up 10.2% compared with 2012. Of which, imports of seafood from India got a remarkable growth and India became the largest seafood suppliers in Vietnam in 2013; followed by Taiwan; Japan; ASEAN; EU; Norway; Chile; China and Saudi Arabia which all have increased sharply compared to 2012. However, there are some market with decreased supply to Vietnam such as South Korea; United States; Canada; Myanmar and South Africa.

  - By forecast, in 2014 imports of seafood from Vietnam will reach $ 800 million, up 11% compared to 2013.

 

Aquatic Imports into Vietnam 2013

      Source: Trade Info – Ministry of Industry and Trade

 

  - In 2012, India stood at the 3rd position, but in 2013 India has overcome Taiwan to become the No. 1 provider of seafood ịn Vietnam. According to statistics of the General Administration of Customs, the import turnover of Vietnam seafood from India in the month 12/2013 reached $ 55.9 million, up 246.3% compared to December 11/2013 and increased to 672.4% compared to December 12/2012. The total import turnover of Vietnam seafood from the market in 2013 reached $ 168.9 million, up 190.1% compared to 2012.

  - By Dec 2013, imports of seafood to Vietnam from Taiwan reached $8.8 million, up 113.9% compared to December 11/2013 and increased by 91% compared to December 2012. In 2013, imports of seafood from the market to Vietnam reached $ 75.6 million, up 20.1% compared with 2012.

  - According to the customs statistics on Dec 2013, imports of seafood from Vietnam from Japan reached $ 6.12 million, up 10.4% compared to Nov/2013 and up 55.4% compared to December 2012. The total import turnover of Vietnam seafood from Japan in 2013 reached $ 7.2 million, up 10.6% compared with 2012.

  - Seafood imports to Vietnam on Dec 2013 from ASEAN reached $ 7.6 million; an increase of 41.1% compared to Nov 2013 and up 34.7% compared the Dec 2012. But overall in 2013, imports from this region fell sharply by 48.7% compared with 2012. The reason is that two largest markets for domestic seafood supply was in Thailand and Indonesia which are significantly reduced compared with 2012.

  - Imports of seafood from Vietnam from the EU in Dec 2013 reached $ 6.12 million, up 54.2% compared to Nov 2013 and increased 89% compared Dec 2012. But total imports of the country in 2013 from this sector decreased by 6.4% compared with 2012.

  - The import turnover increased from Norway. According to the customs statistics, imports of Vietnam seafood from Norway in Dec 2013 reached $ 6.6 million, up 73% compared to November2013 and increased 64.3% compared to December 2012; total imports of seafood from the market in 2013 reached $ 46.4 million, up 11.9% compared with 2012.

  - After the seafood market on the supply, imports of seafood from Vietnam to the rest of the market growth in 2013 was positive from Chile, Russia, China, Saudi Arabia; but supply markets such as Korea, USA, Canada, Myanmar and South Africa decreased slightly compared to 2012.

 

              Source: Trade Info – Ministry of Industry and Trade

 

□ Fishery Enterprises

 

 ○ According to the Chamber of Commerce and Industry of Vietnam (VCCI) in 2011, there were approximately 300 seafood processing enterprises, mainly shrimp and catfish. Of these, 26 firms were listed, listed, modern governance.

 

 ○ In 2013 the fishery has faced many difficulties in raw materials, capital markets, competition, and reduced profit. According to VASEP, by the end of 2012, only about 600 businesses involved in exporting seafood, compared with 900 of 2011. By the end of Q1, 2013, the number of seafood and fishery enterprises declined 40% compared with the same period of previous year. As of mid-2013 only about 30% of the seafood processing plants and shrimp fishing activities got 70% or more capacity, 30% of plants less than 50% of operating capacity, 20% less than 30 % capacity/day, 20% is nearly inactive. Due to the fisheries sector is still very difficult it is likely that the number of enterprises involved in exporting will continue to decline in the near future.

 

 ○ A major challenge enterprises have faced is that the costs of corporate activities increased sharply in recent years. From May 3/2012, the carrier began increased the sea freight prices which push more the burden cost to the enterprises. The shipping rates increased from 640 USD to 1,200 USD per container, making shipping rates in Vietnam higher than other countries in the region of 10-15%. Because of high cost, in the near future, the export activities of domestic enterprises to the European and US markets which are 2 largest export markets of Vietnam will be significantly affected, and the competitive advantage of Vietnam Aquaculture will be detracted.

 

 ○ In addition, numerous other input costs such as gas, oil, electricity, salaries, etc. also increased in recent years has created many difficulties and the pressure to seafood business. This is alarming problem for some competitive export commodities as shrimp, squid, octopus, when competitiveness is being declined due to high production costs, often leads to asking price higher than in other countries.

 

 ○ World economic recession is also objective factors affecting the business activities of Vietnam's seafood exports. In 2012, exports to some key markets, which is the most typical EU declined compared with 2011. Due to the debt crisis in the region which has made the economic and financial difficulties to local enterprises, moreover, unstable demand and slow solvency has led to impact to two staples of exports as fish and shrimp.

 

Capacity of 10 big aquaculture and seafood enterprises listed in stock market

 

 ○ According SSI stock company, in 2012, profits of the listed seafood companies fell. The net profit of HVG, MPC and VHC decreased by 33%, 68.2% and 44.2% respectively compared with the previous year. Fisheries stocks were more volatile in 2012 From January to April, fisheries stocks has increased on average 88.1%, while only 37.1% Index. From May to the end of 2012, the fisheries stocks fell 26.2%, while 13.8% reduction VN Index. According to statistics of VASEP, seafood export turnover of 10 largest exporters in 2012 is over $ 1.2 billion, accounting 20.3% in total exports of the country's fisheries. Almost of the businesses is to export shrimp and catfish.

 

 

 ○ Hung Vuong Corporation (HVG) is an enterprise with the largest power plants of catfish industry (1,100 tons/day), while the second is now IDI and ANV which has a production capacity of about 600 tons of material/day. VinhHoan Corporation VHC seafood capacity is only 500 tons/day, however, the large export factories often have to run about 90% capacity to promptly respond to orders from the company. Viet An (AVF) capacity is about 300 tons/day, while Ben Tre Seafood Import-Export JSC (ABT) got the lowest of about 35 tons/day.

 

 ○ For the shrimp industry, Minh Phu Seafood (MPC) with a processing capacity of about 76,000 tons of finished products/year of 2 plants (including 36,000 tons/year from the plant in Ca Mau and 40,000 tons from the plant in HauGiang). The maximum capacity of MPC’s plants can reach 90,000 tons/year. Sao Ta Food (FMC) has a processing capacity of 18,000 tons of finished products/year in average, and Ca Mau Seafood and Export(CMX) has low processing capacity of 10,000 tons of finished products/year.

 

 ○ For catfish industry: VHC, IDI, AVF still keep revenue in 2012 increased slightly compared with 2011 (respectively an increase of 3.0%, 21.3% and 0.5%) by maintaining the growth of exports. While the 3 remaining are now ANV, HVG, ABT had revenue decline in 2012 by 0.5%, 2.6% and 4.3% respectively.

 

Seafood processing and exporting enterprises in Vietnam

       Source: General Department of Statistics

 

□ Trend of Policy

 

 ○ Policies on planning, production and business

  - Pursuing to Decision 332/QD-TTG approved by the Prime Minister issued 03/03/2011 about aquaculture planning project of Vietnam to 2020, and vision to 2030, of which:

  - Industrial targets

   · The proportion of fisheries GDP accounted for 33.3% by 2020 and 43,5%  by 2030 in agriculture.

   · The value of seafood exports reached approximately $ 11 billion, an average annual growth rate achieved to 7-8%/year (2011-2020).

   · Total production of approximately 7.0 million tons of seafood by 2020 and 9 million tons by 2030 of which catching about 35%; Aquaculture production of about 65%.

   · The share of value added products exports reached 50% by 2020 and 60% by 2030.

   · Approximately 50% of the fish workers are trained by 2020 and 80% by 2030.

   · Income per capita of fish workers increase 3 times.

   · 50% of the coastal fisheries communes island will be built in the model of new rural areas (where 50% of the standard rate of social environmental sanitation, 60% of the traditional fishery villages satisfactory environment).

   · 70% of aquaculture production facilities will be applied national technical regulation on environment (100% of the production facility to build the business up to the requirement of environmental protection).

   · Reducing post-harvest losses to fishing from current 20% to 10%.

  - The Plan is structured under 4 sectors:

   · Planning on fishing

   · Planning on Aquaculture

   · Planning on seafood processing

   · Planning on Logistics fisheries

 

 ○ Policies on supporting fishermen

  - The Ministry of Finance issued Decision No.3312/QĐ-BTC of December 28, 2012 amending the content of Circular No. 188/2012/TT-BTC of November 07, 2012, guiding loan interest rate support and difference interest rate subsidies due to the implementation of support policy in order to reduce the damage after harvesting for agricultural and fishery as follows: Latest within 90 days (instead of 45 days) from the end date of the financial year, the State-owned commercial banks submit year report to the Ministry of Finance including:

   · The money amount of loan interest rate support and difference interest rate subsidies temporarily granted during the year.

   · The money amount of loan interest rate support and difference interest rate subsidies actually arose during the year.

   · The document proposed for settlement.

   · Source: www.fistenet.gov.vn

  - The Ministry of Agriculture and Rural Development issued Circular No.53/2012/TT-BNNPTNT of October 10, 2012 including the list of agricultural and seafood products supported by Decision No. 01/2012/QD-TTg about the support policy for the applying good agricultural manufacturing process to agriculture, forestry and fishery as follows:

   · Agricultural and seafood products selected to the list of  supported products by Decision No. 01/2012/QD-TTg must response 02 following conditions

      : Products have the National Technical Regulation on conditions for ensuring food safety in the production process, semi-processed or Viet GAP or other GAP or organic agriculture standards issued by the Ministry of Science and Technology or other organic agricultural standards allowed to apply by the Ministry of Agriculture and Rural Development;

        Main products have consumption market or export market

   · List of supported agricultural and seafood products under the Decision No. 01/2012/QD-TTg is as follows: Horticultural products: vegetables, fruits, tea, coffee, pepper, rice;

    Animal products: pork, poultry, fowl, dairy, bee

    Seafood products: fish, tiger shrimp, white shrimp, tilapia.

   · Source: www.congbao.chinhphu.vn

 

 ○ Policies on import and export aquatic production

  - The Prime Minister issued Decision No.279/QĐ-TTg of March 07, 2012 approving the development program for export-import fishery through 2015 and orientation towards 2020. The overall objective of this program is to keep sustainably developing exporting fishery with high competitiveness, maintain the position in the top 10 seafood exporters in the world. Developing export is objective as well as motivation for the development of farming, mining and fishery services, contributing to stabilize and gradually improve income and livelihood for farmers and fishermen.

  - Specific objectives through 2015 are as follows: The annual growth rate of seafood exports reaches over 8%, the value of exports in 2015 reaches $ 7.5 billion, the proportion of value added products reaches over 60%; value of export products from aquaculture accounts for about 70%. Besides, the orientation towards 2020 is that the fishery industry will continue to be the key export sector of the country, significantly contribute to the sustainable development of rural economy with a growth rate of over 7%/year, export value is expected to reach $ 10-10.5 billion.

  - To successfully implement this program, the fishery industry needs to increase output of exported processed seafood. In 2015, the volume of exported seafood is expected to reach 1.62 million tons (total output of processed seafood is 2.43 million tons) and in 2020, this number will be 1.9 million tons (total output of processed seafood is 2.85 million tons). The fishery industry strives to increase the proportion of value-added products to account for 60% of total export value. The crucial exported seafood products are frozen seafood, shrimp, catfish, tuna, squid, octopus, dried seafood.

  - Regarding to the export market, the traditional markets are still maintained, particularly for three key export markets (EU-Japan-USA) with an over 60% share of the total exported seafood value:

   · EU market: Striving to achieve 21% of total exported seafood products value with main products are: Catfish (35%), shrimp (15%), tuna (25%), squid and octopus (20%).

   · Japanese market: Striving to achieve 20% of total exported seafood products value with main products are: Shrimp (30%), tuna (10%), octopus (30%) and other seafood (30%).

   · American market: Striving to achieve 19% of total exported seafood products value with main products are: Shrimp (15%), fish (15%), tuna (35%).

  - On the other hand, some other potential markets such as Eastern Europe, Middle East, Africa, South America, China, South Korea, ASEAN, Australia, will be more promoted.

  - Some solutions given in this Decision are: Maintain and develop market, renew export activities and promote trading, develop stable material source and guarantee quality, focus on investing and developing processed export, strengthen inspection activities, guarantee food safety, strengthen management and staff training.

  - Source: www.fistenet.gov.vn

 

 ○ Policies on capital, credit and investment

  - The Minister of Finance has signed Decision No. 48/QĐ-BTC of January 1st, 2013 on the allocation of preferential credit loans to implement the solidified canals programs, investment for rural roads projects, power pumping stations for agriculture, infrastructure, aquaculture, infrastructure on rural village in 2013.

  - The Minister handed over to the Vietnam Development Bank on the capital disbursement to locals all over the country with total incentive credit capital is 4,390 billion VND, according to the following allocation: The mountainous and key agricultural provinces such as HoaBinh, Lai Chau, Lao Cai, Ha Giang, Nam Dinh, Thai Binh, Quang Ngai, DakLak are granted 100-120 billion VND on loan, the rest provinces are in the range of 40-90 billion VND; especially for ThanhHoa and Nghe An province, preferential credit capital is up to 140 billion VND.

  - Source: www.fistenet.gov.vn

 

 ○ Policies on exploitation and protection of fishery resources

  - Support to alleviate difficulties in fishing:

   · Decision No. 289/Q -TTg dated 18-3-2008 and Decision No. 965/QD TTg dated 21-7-2008 of the Prime Minister on assistance to ease difficulties for fishermen in fishing. Attached to it, MARD issued Decision No. 1381/2008-BNN-KTBVNL prescribing standards and norms for economic and technical fishing vessels powered by Decision 289 of the Prime Minister, and coordinate the Finance Ministry building, issued Circular No. 35/2008/TT-BTC guiding the implementation of Decision 289 of the Prime Minister. 7/2008 end, the Ministry of Finance issued Circular No. 71/2008/TT-BTC guiding the implementation of Decision 965/Q -TTg of the Prime Minister.

  - Regulations prohibit fishing area and a complete ban deadline

   · Circular No. 01/2002/TT-BTS on 28/04/2000 by the Ministry of Fisheries (before here) amendment 1 score in Circular No. 04 - TS/TT dated 08/30/1990 guiding the implementation of the ordinance dated 25.04.1989 HDNN and Decree 195-HĐBT Date 06/02/1990 Council of Ministers on the protection and development of aquatic resources of the ban on fishing in 8 deadline coast of Vietnam.

 

 

2. Shrimp, Squid and Octopus

 

□ Shrimp

 

 ○ Production Trend

  - In 2013, there were 30 cities and provinces which have farms of brackish water shrimp. Currently the farming area has reached 652,612 hectares, equal to 99.2% compared to the same period in 2012. Of which the farming area for black tiger shrimp is 58,894㏊, white shrimp (vannamei) 68,719㏊. Shrimp harvest was 475,854 tons, of which the production of black tiger shrimp got 232,853 tons, white shrimp 243,001 tons. The value of shrimp exports reached $ 2.5 billion increased by nearly 33% compared to the same period in 2012 and accounted for 44% of total seafood export value of the country.

  - According to a report by the General Directorate of Fisheries, this year, the total area of ​​brackish water shrimp (black tiger and vannamei) basically completed as planned (both estimated at 654 thousand hectares, with 99.9% of the plan in 2013 ). However, the size of the target species changes dramatically. Tiger shrimp farming area is 590 thousand hectares (about 96% of the plan); Vannamei area is 64 thousand ha (with 160% of the plan).

  - The white shrimp continues to be the subject of breeding priority on several provinces. With advantages such as shorter culture time, higher productivity, profits and selling prices due to lack of market demand forecasted during the next, vannamei shrimp farming area will increasingly be expanded. Specifically, in Quang Ninh, there is 2,500㏊ of vannamei shrimp areas per 9,500㏊ shrimp farming area, with a total output of 8,000 tons. Meanwhile in Ca Mau, farmers have changed from farming black tiger to white shrimp. The province has over 6,000 hectares of shrimp farming area, but 80% of total is to farm white shrimp. In KhanhHoa province, there is 1,100 hectares of vannamei shrimp, accounting for 50% of total aquaculture area, of which the largest white shrimp farming area is mostly in NinhHoa and Van Ninh and Cam Ranh city. However, the mass expansion of shrimp farming area may lead to the consequences of disease and disrupt breeding plan.

  - In terms of output, compared with the general plan of brackish water shrimp production in 2013 increased only slightly (2%), but compared with the previous year, it increased by nearly 11%, reaching 541 thousand tons (including 268 thousand tons of shrimp and 273 thousand tons of white shrimp). This year, the object of shrimp was not really effective, just accounted for approximately 79% of the plan and only 89% of last year. Meanwhile, white shrimp have increased output more than planned production in 2012 (specifically, white shrimp production reached 143.7% of the plan and by 146.6% compared to production in 2012).

  - In 2013, Mekong Delta farming area accounted for 92.5% in the total area of brackish water shrimp and 79.8% of total production in the whole country. In particular, the number and area of prawn farming in this region accounted for 95%, white shrimp accounted for approximately 70% of area.

  - The advantage of Vietnam's shrimp industry

   · As a result of Official Letter 2181/TCTS-dated 16/08/2013 regarding aquaculture shrimp steering to take advantage of high prices, white shrimp area reached nearly 64 thousand hectares, increased by 23.4 thousand hectares of the yearly plan (equal to 153% of 2012). A special feature is that, despite of accounting for less than 10% of the total area of brackish water shrimp farming, the production of white shrimp black tiger shrimp production has exceeded. White shrimp are farmed with increasing yields, and in exceeding the plan. Typically, in Bac Lieu, white shrimp farming area covered 479.8% over the same period in 2012 and reached 472.7% compared to the 2013 plan.

   · Currently, there are 12 per 30 provinces culturing shrimp with a total area of brackish water shrimp to nearly 12 thousand hectares. In particular, black tiger shrimp farming area is 5614.3 ha (more than the planned increase of about 1%), white shrimp of 6344.7㏊ (additional compared to the target of 10%). Main area to farm shrimp mainly is in the Mekong Delta (11,211㏊, accounting for 93.7%), estimated at 45,700 tons of output, mainly white shrimp culture.

  - The situation of production and seed supply

   · In 2013 there were 1,722 hatcheries of tiger prawns breed and 583 of white shrimps. Breeds production was estimated at 68 billion pieces (including 47 billion pieces of white shrimps, and 21 billion pieces of tiger prawns). The brackish water shrimp farms producing mainly concentrated in the central south and the South West. In particular, the province of NinhThuan, BinhThuan, KhanhHoa and Phu Yen accounted for approximately 40% of the total number of shrimp hatcheries in the country; provide approximately 70% of breed pieces for the country industry. The Bac Lieu, Ca Mau and KienGiang also provides a large number of shrimp breeds.

   · Breed quality is uneven. Prices range from 25-30 VND/unit for black tiger shrimp breeds, white shrimp breeds of 80-90 VND/unit. To the Northern provinces such as Quang Ninh, Thai Binh, Nam Dinh due to higher transportation costs, the selling prices is up more than 90 VND per unit.

   · Besides, the problem of breeds and feed sources still exists and makes many difficulties for the industry. The development of many factories and hatcheries without strict management mechanism, no systematic analysis of the quality or modern analysis and uneven quality are affecting to the aquatic food substandard, causing damage to livestock. Aquatic feed issues will cause to quality of shrimp, slow-growing, increasing in the rate of loss.

 

 ○ Export-Import Trend

  - According to statistics from the General Administration of Customs, exports of shrimp from Vietnam in 2013 reached 281.7 thousand tons with a turnover of $ 3.1 billion, up 22.5% of volume and 39.5% of turnover over the same period in 2012. Of which frozen shrimp accounted for 99.4% of volume and 99.8% of turnover. Canned shrimp accounted for 0.5% of volume and 0.15% of turnover, live shrimp accounted for 0.2% of volume and 0.13% of turnover. Dried shrimp accounted for 0.09% of volume and 0.02% of turnover.

  - By forecasts, Vietnam's shrimp export keeps growing in 2014, reaching to 291 thousand tons with a turnover of $ 3.2 billion, up 3.9% of volume and 2.1% in value compared with 2013.

 

Export of Shrimp of Vietnam 2012-2013

      Source: Trade Info – Ministry of Industry and Trade

 

  - Frozen shrimp: the import demand for frozen shrimps of worldwide markets in 2013 was mostly high due to the imbalance between supply-demand. Exports of frozen shrimp from Vietnam in 2013 reached to 280 thousand tons with a turnover of $ 3.1 billion, an increase of 23.1% in volume and 39.6% in value compared with 2013. Vietnamese frozen shrimp may face to a tight quality control from the import markets, thus Vietnam is in requiring timely the quality control of breeds, chemicals, antibiotics, especially in the situation that agar is pumped into raw shrimp was a major influence on the quality and prestige of Vietnam shrimp products. Due to the increase of raw shrimp prices last year, frozen shrimp of Vietnam in 2014 will estimated to increase significantly, especially white shrimp (vannamei). The production of white shrimp is increased mainly due to the increase in area. So the production of white shrimp in 2014 is forecasted increasing by 20% completely.

  - The average export price of frozen shrimp from Vietnam in 2013 reached $ 10.93/㎏, an increase of $ 1.31/㎏ compared to 2012.

 

Export price of frozen shrimp from Vietnam in 2013

        Source: Trade Info – Ministry of Industry and Trade

 

  - The average export price of frozen shrimp from Vietnam in 2014 is forecasted to range from 9.9 to 10.6 USD/㎏ due to the assessment that supplying this item in the world in 2014 will be more stable.

  - The structure of frozen shrimp exports of Vietnam in 2013 was concentrated mainly in the large markets, of which the leading Japanese market accounted for 23.7% market share in volume, followed by the United States market accounting for 23.3%, EU market accounting for 14.6%, the Chinese market for 10.1%, the South Korean market for 9.1%, Australia market for 3.9%, the Taiwan market for 3.4 %, and the remaining markets for 11.9%.

  - Overall, exports of frozen shrimp from Vietnam to the most world markets in 2013 was evaluated a better growth. It is explained that the world's shrimp supply was low due to a number of vendors shrimp like Thailand, China have gotten the difficulty of disease causing mass mortality.

 

Market structure of frozen shrimp exports from Vietnam 2012 -2013

          Source: Trade Info – Ministry of Industry and Trade

 

  - Japan:

   · Exports of frozen shrimp from Vietnam to Japanese market in 2013 reached 66.4 thousand tons, with a turnover of $ 699 million, rose by 12.8% in volume and 15% in value over the years 2012, accounted for 23.7% of volume and 22.9% of value in total exports of frozen shrimp.

   · Recently, Japan has always been the largest export market of Vietnam shrimp. However on May 18, 2012, Japan applied ETQ test mode for 30% of shrimp volume imported from Vietnam to the residue of 0,01ppm, shrimp exports to this market started declining since July and the end August 2012, Japan formally adopted the inspection ETQ to 100% imported shrimps from Vietnam, thus shrimp exports to this market in the last 6 months of 2013 was down by double digits.

   · According to information from Japanese importers, on Jan 21, 2014, the Ministry of Health Labor and Welfare of Japan gave the official announcement about raising the residue level of Ethoyquin (antioxidants used in producing feed for culturing shrimps) in Vietnam shrimp imports into Japan to 0.2 ppm, an increase of 20 times compared to the recent allowed level of 0,01ppm. Additionally, Japan also decided to dismantle regulations of 100% test to imported shrimp from Vietnam about ETQ. The biggest barrier to frozen shrimp exported from Vietnam to this market will be removed, thus this export commodities is expected an extreme growth in 2014.

  - USA:

   · According to statistics, exports of frozen shrimp from Vietnam to the United States market in 2013 reached 65.3 thousand tons with a turnover of $ 824.7 million, up 60.4% in volume and 83.4 % of turnover compared to 2012.

   · On Sept 29, 2013, the United States Department of Commerce (DOC) announced the final decision on anti-dumping tariffs to frozen shrimp Vietnam exported to the United States in the period from Feb 2011 to Feb 2012. In this decision, 33 shrimp exporters of Vietnam to participate in the7th administrative review (POR7) is recognized as not dumping on the American market and be taxed anti-dumping tariffs of 0%. The International Trade Commission United States (ITC) also vetoed the decisions of applying countervailing duty rate of 4.52% from the United States Department of Commerce (DOC) to Vietnam shrimp industry and 6 other countries in the lawsuit against subsidization by the US domestic shrimp industry on Dec 2012. This decision helps frozen shrimp exports of Vietnam to the United States market growing increasingly slim.

  - EU:

   · Frozen shrimp from Vietnam is in competing with Ecuadorian shrimp due to this country's shrimp imports into the EU are entitled to a preferential tax rate of 0%. However, the exports Vietnam have achieved high results. According to statistics, exports of frozen shrimp from Vietnam to the EU in 2013 reached 41 thousand tons with a turnover of 391.9 million, up 11.8% and 30.5% of turnover compared with 2012.

   · Canned Shrimp: Canned shrimp exports of canned Vietnam in 2013 reached 4.9 million, down 22.5% compared to 2012, accounting for 0.5% of volume and 0.2% of turnover shrimp.

   · Shrimp live: live shrimp exports of Vietnam in 2013 reached 590 tons with a turnover of 4.4 trillion dollars, down 63.1% of volume and 52.7% in value compared to 2012 which, China market accounted for 62.7% of volume and 64.2% of turnover, the Hong Kong market accounted for 30.2% of volume and 30.3% of turnover of live shrimp. China is the main export market of Vietnam live shrimp. But because of the China’s bans to import live shrimp from Vietnam in 2013 for China would not control the diseases on shrimp, the amount of export as well as the turnover of this item to China fell sharply.

   · Dried shrimp: dried shrimp exports of Vietnam in 2013 reached 257 tons with a turnover of $ 1.1 trillion, down 207% in volume and 33.4% in value compared with 2012. The reason of the reduce of demand on dried shrimp exports is that the significant increase of frozen shrimp exports lead the reduce of domestic raw dried shrimp.

 

Export markets of Vietnam in 2013

     Source: Trade Info – Ministry of Industry and Trade

 

 ○ Pricing and Tariff

 

Retail Price

       Source: Directorate of Fishery

 

Import Tariff

       Note: MFN: Most Favored Nations (Korea belongs to this group of nations)

                ATIGA: ASEAN Trade in Goods Agreement

                AKFTA: ASEAN-Korea Free Trade Area

       Source: Export–Import Tariff and VAT on Imports Book (Ministry of Finance)

 

□ Squid and Octopus

 

 ○ Frozen octopus

  - Demand on octopus from overseas markets increased stably in recent years. However, the supply of this commodity depends very much on natural conditions, that make output is not stable.

 

Exports of Frozen Octopus of Vietnam 2012-2013

     Source: Trade Info – Ministry of Industry and Trade

 

  - In 2013 was evaluated as an unfavorable year for catching products such as octopus, squid and tuna from Vietnam due to the cost per sea trip increased while the products are not competitive with other countries such as Thailand, China. The price of products is low, so most fishermen had to face with capital losses after each trip. Lot of fishermen already changed to the other profitable segment.

  - According to statistics, exports of frozen octopus from Vietnam in 2013 reached 35.1 thousand tons with a turnover of 165.2 million, down 6.8% of volume and 3.8% of value over with 2012. Compared with frozen squid, the frozen octopus is items with lower export value and suitable with consumer demand and spending levels of residents. However, output of this commodity is not high which made exports in 2013 fall slightly.

  - By forecast, frozen octopus exports of Vietnam in 2014 will reach 37.1 thousand tons with a turnover of 176.5 million, up 5.7% of volume and 6.8% of turnover compared to 2013.

 

Export of frozen octopus of Vietnam

            Source: Trade Info – Ministry of Industry and Trade

 

  - Market structure of frozen octopus export of Vietnam in 2013 recorded a slight transition to smaller markets such as Japan, Russia and Australia. In particular, Korea is still the market leader with 56.8% market share of exports, followed by Japan with 20.8%, EU market with 8.8%, Russian market with 5.4%, Chinese market with 1.9%, Australian market with 1.4%, and 5.1% for the other markets.

 

Market structure of frozen octopus exports from Vietnam 2012 -2013

          Source: Trade Info – Ministry of Industry and Trade

 

  - South Korea - Market leading export octopus: according to statistics, frozen octopus exports of Vietnam to the South Korean market in 2013 reached 19.9 thousand tons with a turnover of $ 84.9 million, down 9.5% of volume and 2.2% of turnover compared with 2012. The exports to this market accounted for 56.8% of volume and 51.4% of value of total frozen octopus exports of Vietnam

  - Japan - Slight growth in volume but decreased in value: exports of frozen octopus from Vietnam to Japan in 2013 reached 7.3 thousand tons with a turnover of 50.1 million, up 3.7% in volume but down 2.8% in turnover compared to 2012, accounting for 20.8% of volume and 30.3% of value of the total frozen octopus exports.

  - EU - Fell sharply in both volume and value: according to statistics, it is showed that the frozen octopus exports of Vietnam to this area in 2013 reached 3.1 thousand tons with a turnover of $ 9.9 million, down 28.1% of volume and 32.6% of value compared to 2012, accounting for 8.8% of volume and 6% of value in the total export.

  - The average export price of frozen octopus: the average export price of frozen octopus from Vietnam in 2013 reached to $ 4.72/㎏, an increase of $ 0.14/㎏ compared to 2012.

 

Export Price of Frozen octopus in 2012-2013 (USD/㎏)

                     Source: Trade Info – Ministry of Industry and Trade

 

Main frozen octopus export markets of Vietnam

       Source: Trade Info – Ministry of Industry and Trade

 

 ○ Frozen squid

  - According to statistics, exports of frozen squid of Vietnam in 2013 reached 32.7 thousand tons with a turnover of $ 180.4 million, down 17.4% in volume and 22.9% in value compared with 2012. Catching production of frozen squid in 2013 kept continuing at a low level and lack of pricing competition to other exporting countries. By forecast, exports of frozen squid Vietnam in 2014 will not get a positive prospect due to the regulation of clear description of catching origin, product specification with the extraction methods. All are certified by authorities while the catching methods of Vietnam are at rudimentary level, thus exports to the EU market (the leading frozen squid export market of Vietnam will face many difficulties.

 

Exports of Frozen Squid in 2012 - 2013

      Source: Trade Info – Ministry of Industry and Trade

 

  - The structure of export market of Vietnam frozen squid in 2013 was shifted slightly to smaller markets. However, EU continued to be the leading export market of Vietnam accounted for 40.2% of market share in volume, followed by Japanese market accounted for 26.1%, Korean market accounted for 14.2%, 3.3% for Israel market, 3% for Taiwanese market, 2.8% for Afghanistan market, the remaining market accounted for 10.3%. Exports of frozen squid of Vietnam to almost markets fell sharply; in contract, the exports to Israeli market recorded a sharp growth.

 

Market structure of frozen squid exports from Vietnam 2012 -2013

         Source: Trade Info – Ministry of Industry and Trade

 

  - EU - A large market for frozen squid exports: Exports of frozen squid from Vietnam to the EU in 2013 reached 13.1 thousand tons with a turnover of $ 62.4 million, down 26.7% in volume and 26% in value compared to 2012, accounting for 40.2% in volume and 34.6% in value of exports of frozen squid.

  - Japan: Exports of frozen squid of Vietnam to the Japanese market in 2013 reached 8.5 thousand tons with a turnover of $68.2 million, down 11.2% in volume and 24% in value compared with Japan in 2012 but it is still the 2nd largest export market of Vietnam frozen squid.

  - South Korea: According to statistics, exports of frozen squid of Vietnam to the South Korean market in 2013 reached 4.6 thousand tons with a turnover of $ 20 million, down 15.1% in volume and 27% in value compared to 2012, accounting for 14.2% in volume and 11.1% in value of total exports.

  - The average export price of frozen squid: the average export price of frozen squid from Vietnam in 2013 reached $ 5.61/㎏, down 0.36 USD/㎏ compared to 2012.

 

Export Price of Frozen squid in 2012-2013 (USD/㎏)

      Source: Trade Info – Ministry of Industry and Trade

 

Main frozen octopus export markets of Vietnam

        Source: Trade Info – Ministry of Industry and Trade

 

 ○ Pricing and Tariff

 

Retail Price

       Source: Directorate of Fishery

 

Import Tariff

       Note: MFN: Most Favored Nations (Korea belongs to this group of nations)

                ATIGA: ASEAN Trade in Goods Agreement

                AKFTA: ASEAN-Korea Free Trade Area

       Source: Export–Import Tariff and VAT on Imports Book (Ministry of Finance)

 

 

3. Industrial Prospects and Ricks

 

□ SWOT

 

 ○ Strength

  - Vietnam has a favorable environmental condition for fishing and aquaculture: long coastal line (3260㎞), big fresh and brackish water areas. Vietnam has several types of high valued maritime products such as shrimp, finned fish, molluscs. There have been enterprises that can meet the international criteria of quality, food safety, seafood safety, HACCP standard. Vietnam has experience in aquaculture like shrimp, a well-developed maritime product exporting system; therefore, Vietnam can export seafood into Japan, a market of demanding high quality and safety.

  - Fisheries industry has developed at a high rate in recent years, expanding from small scale into lager business activities. In addition, Fisheries industry is oriented to have sustainable development, applying efficiency aquaculture practice and Law.

 

 ○ Weakness

  - Lack of raw materials between 2 crops

  - Low added value because Vietnam mainly exports maritime products in terms of raw materials.

  - The product quality is not uniformed. Factories sometimes get troubles with safety measurements, antibiotics range, and tailings in exporting products.

  - Lack of cooperation among exporters, therefore, Vietnam has no power in bargaining.

  - Packaging and design are not suitable.

  - No famous brand names and reputation

  - Lack of experience and skills in long term production

  - Lack of capital investment. Though FDI from Japan, Hong Kong, Taiwan is focusing on fisheries, the capacity is still low compared with other foreign suppliers in regions, thus, the production expenditure in Vietnam is higher than other countries such as Thailand, as a result, it cannot attract much foreign investments.

 

 ○ Consequently, small scaled private enterprises have dominated this sector. There are still several stated owned companies, and they are planning to change into private business type. It is estimated that Vietnam has about 3.4 million people working for fisheries and aquaculture sector, hence, Vietnam has cheap Labor cost but the capacity is low.

  - The disease control is limited. The disease of shrimps often lowers the capacity.

  - Environmental issues are not planed synchronized. Infrastructure is not developed such as ports, safety for fishermen, storm and flood warning system.

 

 ○ Opportunities

  - Offshore resources have not yet explored.

  - The capacity can be doubled.

  - The imported value of sea foods is still on the rise.

  - High demand on safety maritime products from Western markets.

  - Diversified types of products can meet the changing demand.

  - The development of big markets such as China and India is a chance for long term production.

 

 ○ Threats

  - Global competition is more and more tense

  - Offshore fishing gets difficulties because of unstable circumstance in Bien Dong sea

  - Dumping lawsuits about Vietnam shrimps and catfishes.

  - Climate change effects. Vietnam stands on the first place of fisheries affected countries with the red alarming lever, about USD 1.5 billion damage in 2010, and estimated to be USD 25 Billion loses in 2030.

  - Downturn of global economy, the demand for the products of this sector also be limited, According to VASEP, there are about 70% small scaled companies are on the edge of collapse due to low investment, low capacity.

  - The tight regulation on antibiotics control, especially ethxyquin control in Japanese market.

 

□ Risks

 

 ○ Risks in price and domestic market

  - The biggest risk for fisheries industry is unstable price, in which manufacturers and processing factories are most affected. It can be seen that the unstable price of catfish causes loses for fishermen: price of output decreases while the price of raw materials, foods increases. In Can Tho at the beginning of 2013, the price of catfish was VND 20.750/㎏, while the cost for breeding was about VND 23.500/㎏. Moreover, anti-dumping law is stretchered, and tax is also raised, which makes fishermen extremely tired.

 

 ○ Risks in foods safety barrier

  - Vietnam is known as a promising market of fisheries but still be refused for exporting products into EU, USA and Japan, because Vietnam does not have a firmed control on testing and additives usages in processing. From 2002-2010, Vietnam was on the top of fisheries exporting countries that were not allowed to exported products, in which there have been 6300 refused cases from USA, and 1100 cases from Japan from 2006-2010, and 350 cases from Australia.

  - The total losses from not exporting have been reached USD 14 million. The main reasons were polluted, heavy metal polluted products, antibiotics range, not safety condition. This due to mainly from people awareness of using foods, drugs, chemicals, etc which not only affected the quality of products but also polluted surrounding areas.

 

 ○ Risks from exporting markets and competitors

  - Risks on Price

   · The economic downturn of high interest, inflation makes the high cost for domestic production, high price of inputs, thus the price of Vietnam fisheries products are often higher than other countries’. Some companies themselves decrease the price of products to have lower income, which makes more competition, dumping lawsuits, and limited control policy. Besides, the information can affects importers. They are worried about the quality, origin, food safety, etc. as a result, the farmers have to face with exceeding materials, low price of outputs, then they want to quit breeding, resulting in enterprises cannot buy raw materials or buy at high price. This is a hard vicious circle.

  - Vietnam market share in the world

   · According to VACEP, Vietnam has 421 enterprises that meet the standards to exporting into EU, but ranks 10th position in the list and only accounts for 2.6 % the market of EU (2012).

   · Vietnam has supplied for 9% of maritime products in Japanese market.

   · For USA market, Vietnam stands of 5th place, after China, Canada, Thailand, Indonesia. Vietnam has provided 7% the demand of USA market, while China, Thailand and Indonesia accounts for 16%, 12.3 % and 7.1 % respectively.

 

Vietnam Market share in some main exporting markets 2012

       Source: VACEP

 

 ○ Risks from environments and diseases

 

Groups affected from natural disaster, diseases

       Source: IPSARD

 

  - Aquaculture in Mekong Delta has coped with several difficulties such as environment-affected diseases. The unstable environment: in the dry season, hot temperature lasts for long time, the degree between day and night time changes dramatically; water quality is not good, flooded in rainy season. According to the report, the areas that have lost shrimps have been up to 1800㏊, and the affected 30-70% areas were about 1400㏊ in the disease at the first quarter 2013.

 

 ○ Financial Risks

  - Low investment in production

  - Unstable interest, pressure on paying interest

  - Late in payment from buyers

  - Exchange rate  risk

  - Inflation

 

Financial Risks for breeding households in Mekong Delta

       Source: IPSARD

 

  - It is said that most of the fishermen and breeding farmers have to make a big loan with high interest rate, the time of payment is short, whereas, the late of payment from buyers is normally 15-30 days, sometimes 3-4 months. Therefore, it creates a big lose from paying high interest for fishermen.

 

The Lose Lever of Breeding households due to late payment

       Source: IPSARD

 

  - As can be seen in the table above, for each household who has 3300㎡ of breeding, the revenue is VND 370 million, they have to make a loan of VND 1.5 billion from several sources. If the interest in 2011 was 18% and the enterprises were late in payment, then, households had to pay NVD 37 Million, in which VND 22.1 million was interest and the rest VND 15 million was opportunity cost. This lost accounts for 10% of the nominal income. The common late payment period is 1-3 months; it means that each household will lose 10-30% of the total income.

 

 ○ Policy Risks

  - The change in policy has directly affected to production: capital expenditure, breed quality, foods and other materials. It also influences on the consumption of the market such as tax, market control, quality standard, etc.

 

Policy Risks

       Source: IPSARD

 

  - Most of the new policies are aimed at creating the good effects for people; however, they also result in side effects, especially in this difficult economy. For example, the increase in interest rate from 8% (2010) to 14.4% (2011), for commercial banks, it raised up to 18.8%. From the government’ view, this change can help to decrease the inflation, stabilize the monetary market; however, it prevents fishermen from making a big loan with too high interest rate. Moreover, quality policy is another obstacle for fishermen, which affects the consumption capacity in domestic and foreign market.