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VDSC: Seafood exports to continue to grow in 2022

06/01/2022

VDSC believes that seafood exports in 2022 will continue to grow thanks to high demand and recovery in domestic production. In addition, the increase in selling prices and the cooling of freight charges will help seafood businesses increase revenue and profit margins.

According to the Association of Seafood Exporters and Producers (VASEP), seafood export turnover in 2021 reached USD8.9 billion, increased by 6% over the same period in 2020.

In a recent analysis report, Viet Dragon Securities Joint Stock Company (VDSC) is of the opinion that in the picture of seafood exports in 2021, the US market is considered a bright spot when the economic recovery is fast and the vaccine coverage is high.

This market will continue to grow thanks to high demand while US domestic production declines and seafood prices in the country increase. On the contrary, the European market may grow more slowly due to high competition from other exporting countries and new restrictions on the Omicron variant.

With market signals, the recovery of domestic production will be the driving force for seafood exports in 2022 to reach USD 8.9 billion, equivalent to that of 2021.

Shrimp and pangasius exports will increase sharply to keep up with high retail demand and the recovery of the food service industry. However, the Omicron variant could impact the foodservice industry, reducing the rate of seafood consumption.

VDSC forecasts that seafood export prices will increase sharply when import demand increases and raw material supply is in short supply.

In addition to the selling price factor, cooling logistics costs will likely become an important catalyst to help Vietnamese seafood businesses increase profits in 2022.

Specifically, the World Composite Index is of the opinion that freight costs began to decline in November after peaking in September and October. Sea freight rates in 2022 are unlikely to return to pre-pandemic levels but will be lower than in 2021.

This is the driving force for leading seafood enterprises in the industry to negotiate with their partners to change their shipping contracts from CIF (the seller pays the shipping costs) to the FOB (the buyer pays the shipping costs).

VDSC hopes that the quick recovery of production, along with the increase in selling prices and cooling of freight rates, will help businesses increase revenue and profit margin.

 

Kylie Nguyen

© 2019 Vietnam Bank for Agriculture and Rural Development No. 2 Lang Ha street, Ba Dinh district, Hanoi, Vietnam
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