Tuna exports face difficulty in recovering after Covid pandemic
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|the EU-Vietnam Free Trade Agreement (EVFTA) can be considered as leverage to boost tuna exports to the demanding European market in the year ahead. (Photo: VOV)|
The association stated that the country’s tuna exports during 2020 endured an annual decline of 9.8% to US$649 million, with the item anticipated not to enjoy a recovery this year due to the COVID-19 pandemic not being brought under control in several major markets worldwide.
Furthermore, the United States, the largest export market for Vietnamese tuna, is facing fierce competition from cheap canned tuna products from China.
Simultaneously, several major importers in the US, including Walmart, Bumble Bee, and Chicken of the Sea, have turned to seek sustainable supply sources of tuna, which could potentially reduce the import demand for tuna products.
With regard to the EU market, the EU-Vietnam Free Trade Agreement (EVFTA) can be considered as leverage to boost tuna exports to the demanding European market in the year ahead.
Despite these advantages, frozen steamed tuna fillet products, a key Vietnamese key export item, are projected to experience a downward trajectory in the opening months of the year. This is due to these products enjoying tax incentives under the EVFTA, therefore, they will not exempt from a preferential tariff of 0% in line with the autonomous tariff rate quota (ATQ) when being exported to the EU.
Moreover, the import quota for this type of product in line with the ATQ has been increased to 35,000 tonnes from 2021, thereby creating favourable conditions for Chinese tuna exporters.
At present, the country has 205 local businesses exporting tuna products to 108 markets globally, with the US, the EU, ASEAN, Israel, and Canada making up the nation’s five major markets.
Tuna exports in 2020
|Photo: Vietnam Insider|
Tuna exports to the major markets in the EU of Italy, Germany and Spain all record good growth over the same period in 2019 at 60%, 20% and 41%, respectively. It is forecast that Vietnam's tuna exports to the EU at the end of the year will continue to record good growth.
According to information from the Vietnam Association of Seafood Exporters and Producers, in the fourth quarter of 2020, Vietnam's tuna exports to a number of major markets have changed positively. As a result, tuna exports in October 2020 have prospered compared to the same period in 2019.
Specifically, according to statistics of Vietnam Customs, Vietnam's tuna export value in October 2020 reached nearly USD 65.5 million.
In the first 10 months of 2020, the US continues to be the largest tuna export market of Vietnamese enterprises with a value of USD 235.5 million, accounting for more than 43% of the total export value. The value of exports to this market continued to recover and stabilize after 5 consecutive months of decline due to the negative impact of the Covid-19 pandemic.
However, according to enterprises, the low growth rate cannot compensate for the decline since the beginning of the year. Currently, the US economy has reopened, however, it is expected that demand for processed and canned tuna will continue to increase. Therefore, it is likely that Vietnam's tuna exports to the US will continue to recover in the coming months.
The Free Trade Agreement between the European Union and Vietnam (EVFTA) continues to have positive impact on Vietnam's tuna exports. The tariff incentives that this agreement brings have increased the competitiveness of Vietnam's tuna products, therefore Vietnam's tuna exports in October continued to record good growth, an increase of 17% over the same period in 2019. Accumulated for the first 10 months of 2020, the value of Vietnam's tuna exports to the EU reached more than USD 115 million, an increase of 0.5% over the same period in 2019.
In particular, exports to the major markets in the EU of Italy, Germany and Spain all record good growth over the same period in 2019 at 60%, 20% and 41%, respectively. It is forecast that Vietnam's tuna exports to the EU at the end of the year will continue to record good growth because importers are looking to go ahead and prepare for the consignments in early 2021 to enjoy preferential tariff quotas under EVFTA.
In addition, tuna exports to Japan also continued to record good growth in October. The export value to this market in October reached nearly USD 2.9 million, an increase of 29.3% over the same period in 2019. This partly offset the decrease in export value in previous months. And thanks to this growth, Japan surpassed Israel to become the fourth largest tuna import market of Vietnam.
Businesses are expected that the positive trend of the markets will continue in the last two months of the year because countries are entering the big year-end holiday, and consumption demand will increase.
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