The effect of the New-generation free trade agreements continuously brings about breakthrough in shrimp exports (25-12-2020)

Thanks to the impact of the New-generation of free trade agreements (FTA), shrimp exports to EU and Canadian markets continuously has positive changes in recent years.
The effect of the New-generation free trade agreements continuously brings about breakthrough in shrimp exports

As the only area reporting growth since February 2020, Vietnam shrimp exports are some highlights for Vietnam agriculture. Mr. Truong Dinh Hoe - General Secretary of Vietnam Association of Seafood Exporters and Producers (VASEP) said: In September 2020, Vietnam shrimp total export value reached nearly 385 million USD (the highest growth rate since March 2020), increased by over 25% compared to September 2019. Accumulative in the first 9 months of this year illustrated: shrimp exports reached 2.7 billion USD, increased by 10.5% compared to the same period last year.

Regarding shrimp exports (e.g. processed shrimp, frozen shrimp, and shrimp), Vietnam is rated first in the field related to processed shrimp when accounting for 28% of the total export value of the world. VASEP data shows that in 2019, vietnam's export value of processed shrimp reached 1.3 billion USD, equivalent to 40% of the total export value of Vietnam's shrimp. This growth trend has continued throughout these past few months although the Covid-19 epidemic remains uncontrolled.

In particular, in 2020, despite the severe impact of the Covid-19 epidemic, the value of Vietnam's shrimp exports to the US, EU, Japan, Canada’s market still achieved positive growth. Particularly, in the EU market, under the impact of the EU-Vietnam Free Trade Agreement (EVFTA), the import tax on processed shrimp gradually decreased from 7% to 0% in the next 7 years. Meanwhile, the import tariffs of Vietnam’s competitors such as India, Ecuador, Indonesia, and Thailand remains at between 4% and 20% depending on the country. With reduced import tariffs, Vietnam's processed shrimp market is expected to increase in the upcoming time due to better selling price competitiveness.

Mr. Truong Dinh Hoe said that in fact, since August 2020, shrimp exports in general and processed shrimp in particular have increased from 10 - 15% compared to July 2020, thanks to the positive effects of EVFTA. Specifically, data from the General Department of Customs showed that in September 2020, the value of Vietnam shrimp exports to the EU reached 57.6 million USD, increased by 35.4% compared to the same period last year. In the first 9 months of this year, shrimp exports to this market reached over 371 million USD, increased by 2.3%. More encouragingly, retail or online sales continue to increase; demand for retailing shrimp will be greater preparing for the year-end holidays.

In the Canadian market, thanks to the impact of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), shrimp exports to this country also increased significantly. As of October 15, 2020, Vietnam’s shrimp exports to Canada reached 146.5 million USD, increased by nearly 19% compared to the same period last year.

Previously, in 5 years (2015 - 2019), Vietnam shrimp exports to Canada also increased from USD 139 million in 2015 to USD 152 million per year. Previously, in 5 years (2015 - 2019), Vietnam shrimp exports to Canada also increased from 139 million USD (in 2015) to 152 million USD per year. Notably, Canada is seen as a gateway to global markets thanks to its access to markets with priority through 14 trade agreements with 51 countries and nearly 1.5 billion consumers. The total GDP is 49.3 trillion USD. Therefore, VASEP recommends shrimp producers boost exports to Canada. To implement, according to VASEP, businesses must meet some requirements from CPTPP such as human resources, production chain, food safety to increase the competitiveness of goods in this market.

In addition to the EU and Canada markets, in the markets of Japan and ASEAN, VASEP is also recommending businesses having solutions to increase the competitiveness of shrimp to increase exports to enjoy tariffs according to the FTA signed in these countries.

According to data from securities companies, the increased exports has helped the revenue of businesses in this industry significantly improve. Specifically, Sao Ta food (FMC) achieved revenue growth of 16.3% over the same period; Camimex Joint Stock Company (CMX) had revenue growth of 46.2% over the same period. Minh Phu Group - MPC has revenue in 6 months of 2020 decreased by 25.8% over the same period, because the anti-dumping tariffs on shrimp products to the US increased from 0% to 10% from January 2020. Despite this, Minh Phu Group's after-tax profit increased due to reduced transportation costs and increased financial profit.

Huyền Anh

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