Shrimp export target ambitious, but achievable

While many factors come into play, ensuring a stable supply of high-quality produce and diverse, value-added products will be crucial to meeting the shrimp export target of US$10 billion by 2025 set by Prime Minister Nguyen Xuan Phuc, two prominent seafood exporters told Viet Nam News reporter Ta Thu Giang.

Truong Dinh Hoe is the General Secretary, Viet Nam Association of Seafood Exporters and Producers (VASEP); and Dang Quoc Tuan is the deputy general director, Viet Nam-Australia Seafood Corporation.

Do you think the PM’s target is feasible?

Truong Dinh Hoe

Shrimp export value of $10 billion by 2025 is a big target. It will need great efforts, not just from shrimp farmers and seafood processors, but also from the Government. The investment will be needed in the whole chain: post-larvae, feed, seasonal planning, aquaculture methods, processing technology and seeking and expanding markets.

The boom of shrimp production in India, the recovery of productivity in Thailand after early mortality syndrome and the development of the shrimp industry in Indonesia have put great pressure on the Vietnamese shrimp industry.

However, Viet Nam can reach its target if we stabilise our high-quality shrimp supply, maintain tiger prawn production and keep our customers in large markets like the US, Japan, the Republic of Korea and Australia. Increasing production and diversifying value-added shrimp products will push up value and raise our competitive capacity.

Increasing demand and price changes in the world market are other important factors. The demand for shrimp may sharply increase in China as its population and average income rises.

Dang Quoc Tuan

I think it is possible to reach this target. In the global market, people naturally move from eating four-legged animals to poultry and seafood. Shrimp is a high-quality product with a big gap between supply and demand. I don’t have figures to compare, but I see demand for shrimp rising along with the increase in world population and prosperity.

We have signed free trade agreements (FTAs) with Japan, the Republic of Korea, Russia and Australia – these are difficult markets. This should make it easier for Viet Nam to export shrimp products.

As for the target, I think the PM himself has thought of creating opportunities for shrimp exports in negotiations with foreign leaders.

To reach this target, we need to figure out two things: Can we produce such a huge volume of shrimp and will the market consume all of it?

We have to expand the natural area of shrimp farming, apply advanced, environmentally-friendly technologies in raising shrimp, and increase production capacity by between 1.8 million and two million tonnes per year.

With the Government already helping the shrimp industry, why are businesses still facing many difficulties?

Truong Dinh Hoe

Most of our shrimp farms are small scale. We have few concentrated shrimp farms. Our farmers struggle to access quality input materials including brood-stock, post-larvae, feed, veterinary medicines and modern shrimp raising processes. Therefore, exporters have to bear losses if shrimp products are sent back for various reasons, including chemical and antibiotic residue. This also means that import markets have examined the quality of Vietnamese shrimp more closely.

The US is the largest importer of our shrimp. However, exporters have been dealing with anti-dumping duties levied by the US Department of Commerce since 2004 on Vietnamese frozen warm-water shrimp. The final result of the 11th administrative review from February 1, 2015 to January 31, 2016, announced last November, imposed a general tax of 25.75 per cent.

Dang Quoc Tuan

First of all, we need to solve the environmental problem. Our shrimp aquaculture environment is degrading and we do not have large amounts of funds to deal with it. This has resulted in pollution and disease outbreaks.

To make changes, the State needs to invest in improving the environment, upgrading canals, water supply systems and breeding areas. In particular, we have to control the use and quality of feed. The way it is traded is troublesome. It is one of the factors destroying the environment.

One of the most difficult things for Viet Nam’s shrimp industry is that we are hugely dependent on imported brood-stock. We had to import 100 per cent of brood-stock, or about 250,000 and 300,000 units per year, until recently. We have been passive on the issue of post-larvae resources – leading to difficulties in managing its quality.

Since 2010, the Viet Nam – Australia Seafood Corporation has worked with leading international shrimp research institutes to conduct a brood-stock selection programme in Viet Nam. In 2016, for the first time, we produced our own brood-stock.

As the first and the only company producing brood-stock in the country, we supplied 15 billion post-larvae to the market, 24 per cent of the market share.

The Ministry of Agriculture and Rural Development selected our company as a driving force for the shrimp industry. We are in charge of building a trademark for Vietnamese shrimp and applying advanced technologies and spreading them. To have a good trademark, we will have to ensure quality and meet people’s demands.

We have built four high-quality shrimp production complexes in Viet Nam. Our target is to produce ‘the perfect shrimp’. To reach this target, we will focus on traceability and food safety and hygiene.

What are the major challenges that the Vietnamese shrimp industry faces when it enters FTAs and agreements like the Trans-Pacific Partnership (TPP)?

Dang Quoc Tuan

The TPP is a great deal for Viet Nam and the shrimp industry in particular. However, US President Trump has withdrawn from the deal that was negotiated by former President Barack Obama.

The US is a large shrimp export market for Viet Nam. With the president’s decision, Viet Nam lost opportunities to boost shrimp exports.

But I think there may be bilateral negotiations with the US. We should continue focusing on our price and quality to expand business in hard markets like the US.

Viet Nam has for three consecutive years (2014-16) been ranked the third largest shrimp exporter in the world following India and Indonesia. Our development will depend on the market’s demands, which will be based on quality and price.

Truong Dinh Hoe

The biggest challenge is our competitive capacity on the world market.

The price of materials is still high. Compared with India and Thailand, it was found that several Vietnamese seafood products are between 10 per cent and 30 per cent more expensive than that of those countries. It also found that there were many factors behind the higher prices, including import shrimp varieties, feed, input materials, losses after harvest, power and water and other administrative costs. These are important factors that impact the country’s competitiveness.

With the TPP, Vietnamese businesses will have to deal with technical barriers, quality standards and certificates of origin with stricter standards than other FTAs. To cope with such challenges, Vietnamese businesses need to have a thorough grasp of Viet Nam’s commitments, in fields directly related to their business and other areas.

To solve the problems, the State needs to study the country’s post-larvae production to raise its management efficiency from production to output: planning concentrated post-larvae production farms; building infrastructure; punishing unqualified production units; and guiding local authorities to supervise local farms.

To ensure stable shrimp material resources for export processing, the State needs to build a clean shrimp programme that does not use antibiotics. The Government should devise concrete programmes to raise people’s awareness of clean shrimp and strengthen supervision of the use of antibiotics to ensure safety and hygiene of seafood products. — VNS