According to VASEP, demand for Vietnamese seafood by the US importers can recover in the next few months when inventories reduce and consumers tend to buy more at the end of the year.
In the first five months of 2023, Vietnam achieved USD 563 million from seafood exports, down nearly 50% from the same period last year. All categories reduced sharply by 30-60%, with the most declining items being shrimp and pangasius, -42% and -62% respectively as compared to the same period last year.
However, the month-on-month revenues from exports to the US have shown positive signs. Even though a 39% decrease was recorded in seafood exports in May 2023 as compared to the same period last year, the value reached the highest level since the start of the year with USD 151 million. A noticeable increase in sales of shrimps and pangasius was recorded as compared to the previous month, with USD 68 million and USD 33 million respectively.
According to VASEP, besides inflation, inventory is one of the causes of the slowdown of seafood exports to the US. When embracing themselves for short supply in the first half of 2022, local importers rushed to buy seafood, leaving a huge amount of inventories. Thus, the US importers need some time to clear their warehouses. Obviously, when inventories are sold at cheap prices, imported products find it hard to compete.
VASEP anticipates that when inventories reduce in the next few months and the festival season approaches with higher demand, importers will place more orders of Vietnamese seafood.
A report by VNDirect in early June predicts that the demand for seafood in the US can recover in the second half of 2023 when inflation slows, inventories reduce, and demand increases during year end holidays. All these factors can help increase the second-half year value of Vietnamese seafood by 40-50% as compared to the first-half year value.