Pangasius exports to EU expected to gain strong growth this year

21/08/2022    39

Pangasius exports to the EU market are forecast to reach over US$200 million in 2022, up 90 per cent compared to 2021, according to the Việt Nam Association of Seafood Exporters and Producers (VASEP).

From the beginning of this year to the middle of July, the pangasius exports reached nearly $122 million, an increase of 91 per cent. This is a good business result for the domestic pangasius production industry after a long period of solid decline in pangasius exports to the EU from 2010.

Notably, all markets in the EU bloc strongly increased imports of Vietnamese pangasius, with the lowest growth rate at 25 per cent and the highest at nearly six times the figure of last year.

The top five most significant markets in the bloc included the Netherlands (up 72 per cent), Germany (up 107 per cent), Spain (up 75 per cent), Belgium (up 92 per cent) and Italy (up 90 per cent).

More than 93 per cent of the pangasius export value to the EU market was from frozen pangasius fillets with a value of $113.5 million, up 94 per cent on the year. Frozen pangasius products accounted for about 4.4 per cent of the total exports, and the rest of processed pangasius accounted for 1.6 per cent.

According to VASEP, this year, the EU demand for pangasius imports will surge strongly after two years of suppression due to COVID-19, while the local production is not enough to meet the market consumption. 

The lack of raw white fish in the context of record inflation in the EU is an excellent opportunity for Vietnamese pangasius products. The EVFTA preferential tariff will bring more advantages to Vietnamese pangasius exported to the EU.

Challenges remain

According to Lê Hằng, VASEP director of communication, exporting seafood to the EU market is facing many challenges because each market in the EU bloc has its own requirements. An obstacle for seafood enterprises exporting to the EU is a misunderstanding about granting a certificate of origin and rules of origin.

Besides, inflation now makes EU consumers tighten their spending, focusing on moderately priced items. The lowest EUR/USD exchange rate in 20 years also makes consumers limit spending. This causes importers to re-negotiate with exporters to delay the imports.

Other challenges include higher demand in certification of the EU market or environmental and labour requirements, which are also serious problems for Vietnamese seafood.

To take full advantage of the EVFTA, VASEP expects more support from the Import-Export Department and the Ministry of Industry and Trade for businesses to make the most of preferential tariffs and apply well rules of origin to reduce obstacles when exporting seafood to the EU market.

The EU used to be Việt Nam's largest pangasius import market, with peak sales of $511 million in 2010, accounting for 36 per cent of Việt Nam's pangasius exports. 

Vietnamese pangasius also accounted for 22 per cent of the market share of white fish imported to the EU. Pangasius was considered a competitor to some other white fish species in Europe.

In 2010, articles and television programmes in some European countries released false information about pangasius production in Việt Nam. That caused Việt Nam's pangasius exports to plummet.

In 2021, pangasius exports to the EU reached just over $106 million, accounting for 7 per cent of Việt Nam's total pangasius exports. In the EU white-meat fish import market, Vietnamese pangasius only accounts for 1.6 per cent of market share.

The EVFTA, effective from August 1, 2020, brought an excellent prospect for Việt Nam's seafood exports, including pangasius, to this market. Accordingly, the export of pangasius products will receive tax reduction under a three-year roadmap.

Smoked pangasius exports will have the tax reduction route within seven years from the effective day of the agreement.

However, the advantages of tariffs did not promote an increase in pangasius exports to the EU in 2020 and 2021 because of the pandemic.

Social distancing and lockdowns caused the food service segment, the largest consumption channel of pangasius in Europe, to be closed.

There were also many difficulties for the domestic pangasius industry, including a broken supply chain due to logistics stagnation, lack of shipping containers and sea freight at 4-10 times higher than before the pandemic.

Source: Vietnam News