Workers process shrimp for export. (Photo: VNA) Hanoi (VNA) – As Vietnamese exporters of aquatic products, including shrimp, are gradually adapting to the commitments made in the UK - Vietnam Free Trade Agreement (UKVFTA), shrimp exports to this European market are forecast to bounce back and post double-digit growth rate during 2022 - 2025.
So said the Agency of Foreign Trade under the Ministry of Industry and Trade in its recent publication on how to develop the British market for the fishery sector.
Gaining advantages from UKVFTA
The agency said that thanks to favourable tariffs under the UKVFTA, aquatic products of Vietnam, including shrimp, have gained a competitive edge compared to those from other countries like China, Thailand, Malaysia, Indonesia, the Philippines, India, and Brazil, which haven’t signed an FTA with the UK.
Under this deal, which inherits part of the EU - Vietnam FTA (EVFTA), the tariffs on almost all shrimp materials imported into the UK have been slashed to 0% from 10-20% as soon as the agreement took effect.
However, to benefit from favourable tariffs under the UKVFTA, aquatic products of Vietnam must comply with the trade pact’s rules of origin, which are also similar to the EVFTA’s.
The Foreign Trade Agency said Vietnamese exporters of aquatic products are gradually adapting to the commitments made in the UKVFTA as seen in the fact that before the deal came into force, aquatic exports to this market had posted good but unstable growth, while shipments have become more stable since the UKVFTA took effect in December 2020.
Vietnam’s shrimp export is believed to hold many advantages thanks to the UKVFTA. (Photo: VNA) In 2021, shrimp made up 74% of Vietnam’s aquatic exports to the UK but the revenue from this product also fell 3.5%. Apart from higher transportation cost, Vietnamese shrimp also faced strong competition from the Indian rival in the UK as Indian shrimp are cheaper and also smaller, making it suitable for retail sales amid the COVID-19 pandemic.
Efforts made to maintain market share, boost intensive processing
Demand in the UK is very big, even bigger than some single markets in the EU.
Last year, shrimp exports substantially contributed to the entire fisheries sector export value of about 11 billion USD, which was a new record.
However, the Foreign Trade Agency predicted that in the time ahead, UK consumption of aquatic products will be affected by the global trading situation and soaring inflation. Besides, its import of aquatic products will also be impacted by rising expenses, including transportation cost.
Shrimp producers in the Mekong Delta, the largest aquaculture hub in Vietnam, forecast the global shrimp output will grow 5% annually on average to exceed 5 million tonnes in 2022 and 2023. Shrimp products from Vietnam are performing relatively well in Japan, the Republic of Korea, Australia, and the UK, and businesses are striving to maintain their market share and boost intensive processing.
Shrimp exports substantially contributed to the entire fishery sector’s export growth in 2022. (Photo: VNA) Major shrimp producing countries like Ecuador and India now have a good output and global goods trading is in transition. Vietnam’s shrimp exports are forecast to stay stable at over 4 billion USD, with the shipments to the UK making up about 3.6%.
In the long term, given consumer preference for aquatic products, the UK is still a potential market for Vietnamese firms. Businesses that adapt to the UKVFTA’s commitments will also enhance their competitiveness in this market.
During 2022 - 2025, shrimp exports to the UK may recover and sustain an annual growth rate of more than 10%, the Foreign Trade Agency said in its publication./.
