Photo: VASEP/FIS

Whiteleg shrimp export prices to the US are more positive in the second quarter of 2024

VIET NAM
Wednesday, August 07, 2024, 07:00 (GMT + 9)

As of July 15, 2024, Vietnam's shrimp exports to the US reached 341 million USD, up 2% over the same period in 2023. After increasing by 16% in the first quarter, Vietnam's shrimp exports to the US in the second quarter decreased by 7%. In the second quarter of this year, shrimp exports to the US reached 182 million USD, down 7% over the same period in 2023.

Although inventories in the US have decreased, the purchasing power of importers is not high because they believe that shrimp prices will continue to decrease, so they have not increased their purchases. Shipping costs have increased dramatically by 40% since May because ships have to go around the Strait of Hormuz.

Because the US imposed very high tariffs on China, from 50 to 100 percent, China has taken all the containers back home to prepare for exporting to the US before the new tariffs are imposed. This has caused Vietnam to not have enough ships and containers, even though it still accepts high prices.

In the first half of 2024, the average export price of frozen whiteleg shrimp to the US fluctuated from 9.6 - 10.1 USD/kg, the price of black tiger shrimp fluctuated from 14.9 - 19.3 USD/kg. The average price of frozen whiteleg shrimp exported to the US in the second quarter of this year recorded a slight increase compared to the first quarter of the year, but was still lower than the same period in 2023. The average export price of black tiger shrimp to the US in the second quarter of this year tended to be opposite to that of whiteleg shrimp. The price of black tiger shrimp exported to the US in the second quarter of this year tended to decrease compared to the first quarter of this year. The average export price of black tiger shrimp decreased continuously from March to June.

US shrimp imports increase from May

According to FAS.USDA, the US imported 297,928 tonnes of shrimp worth $2.3 million in the first five months of this year, down 1% and 8% in volume and value, respectively, compared to the same period last year. In May 2024, the US imported 63,973 tonnes of shrimp worth $486 million in May 2024, up 3% in volume but down 7% in value compared to the same period last year due to a drop in prices to $3.59/lb, down 3% from the previous month ($3.7/lb) and 8% from May 2023 ($3.92/lb).

Thus, US shrimp imports have begun to increase since May despite preliminary regulations on anti-subsidy and anti-dumping duties applied to exporting countries.

Traditionally, the US imports about 40% in the first half of the year and 60% in the second half. So based on data from January to May, the total volume of US shrimp imports in 2024 is likely to be higher than in 2023.

The US Department of Commerce (DOC) has launched an anti-subsidy investigation into frozen warm-water shrimp from four major shrimp suppliers to the US, including India, Ecuador, Vietnam and Indonesia, affecting Vietnam's shrimp exports. The preliminary investigation results are available and shrimp exporting enterprises must deposit funds from April 2024. The final results are expected to be available in August 2024 and the International Trade Center (ITC) will vote to evaluate the investigation results in October 2024.

Vietnam's shrimp exports expected to be more positive amid positive US economic news

In August, the US will decide whether to upgrade Vietnam to a market economy or not. If the results are positive, Vietnamese shrimp exports to the US will be “easier to breathe”.

With Ecuadorian and Indian shrimp facing warnings about antibiotics and labor issues, there could also be new opportunities for Vietnamese shrimp.

According to the report, the 2.8% growth of US GDP in the second quarter of 2024 exceeded economists' forecasts and showed a strong recovery after only increasing by 1.4% in the first quarter of the year. Consumer spending, business investment and exports, wages increased and unemployment rate was low. Inflation in the US showed signs of cooling and the Fed is expected to cut interest rates in September 2024. Positive information about the US economy will have a positive impact on Vietnamese shrimp exports to the US.

US shrimp demand is forecast to increase slightly in the third quarter, and prices will increase slightly from July onwards thanks to year-end festival consumption demand, increasing the purchasing power of importers.

Faced with many challenges, businesses need to invest in research and development to improve product quality, reduce production costs and improve management processes.

In addition, finding new markets is also an important solution. In the context of the US market facing many difficulties, Vietnamese enterprises need to boost exports to other potential markets such as Europe, Japan, Korea and China. This not only helps reduce dependence on the US market but also creates opportunities for the Vietnamese shrimp industry to develop sustainably in the long term.

In the long term, the Vietnamese shrimp industry needs to develop a comprehensive development strategy, including improving the quality of shrimp breeds, improving farming and processing processes, and building strong brands to increase the added value of shrimp products. At the same time, it is necessary to strengthen cooperation with international partners to learn from experience and advanced technology, thereby enhancing the competitiveness of the Vietnamese shrimp industry in the global market.

Author/Source: Kim Thu / Vietnam Association of Seafood Exporters and Producers (VASEP) | Translated from original in Vietnamese

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