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VIFTA- Opportunity for Vietnamese seafood to enter the Middle East market

28/08/2023    202

The Free Trade Agreement between Vietnam and Israel (VIFTA) was officially signed on July 25, 2023, will open up opportunities for Vietnam's seafood exports to Israel and the Middle East market.

Great space from Israel

The Free Trade Agreement between Vietnam and Israel (VIFTA) was officially signed on July 25, 2023, which will open up opportunities for Vietnam's seafood exports not only to access the Israeli market, but also penetrate into the vast Middle East market.

According to statistics of Vietnam Customs, Israel is the second largest single tuna import market of Vietnam after the US. In the past 5 years, Vietnam's tuna exports to Israel have been unstable, increasing and decreasing continuously. However, in the first 6 months of 2023, Vietnam's tuna exports to Israel are growing continuously with a growth rate of up to 3 digits in some months. Accumulated in the first 6 months of 2023, export turnover to Israel reached nearly USD 25 million, up 92% over the same period last year.

According to Ms. Kim Thu, tuna market expert of the Vietnam Association of Seafood Exporters and Producers (VASEP), in the context that exports to traditional main markets have all decreased, Israel is a potential replacement market because this is a market with high purchasing power and high solvency. Besides, Israel is a country with no natural resources, limited domestic labor resources; although it is a small country, the consumption demand is quite large. Therefore, this market still has a lot of room for Vietnamese tuna businesses to exploit effectively.

This year, Vietnam's tuna exports to Israel increased over the same period, especially processed and canned tuna products. Exports of frozen tuna meat and fillets of Vietnam still accounted for the highest proportion of 47%. The export value of this product group increased by 29% compared to the same period. Meanwhile, the export value of canned tuna increased by 375%, other processed tuna products increased by 83%.

In recent years, Vietnamese tuna products exported to Israel are competing with similar products from Thailand and China. According to statistics from the International Trade Center (ITC), Vietnam is the second largest tuna supplier to this market after Thailand and before China. It is expected that the VIFTA Agreement will be an opportunity for Vietnam's tuna products to increase their market share in this market and in the Middle East countries.

Expectation of exports increases at the end of the year

In seafood products, tuna exports saw a deep decrease in the first half of 2023. According to statistics of Vietnam Customs, Vietnam's tuna export value in June 2023 only reached nearly USD 65 million, down 28% over the same period in 2022. Cumulatively in the first 6 months, Vietnam's tuna exports reached USD 382 million, down 31% compared to the first quarter of 2022.

Exports of high value fresh, frozen and dried tuna products are still lower than the same period last year. The export value of this product group decreased by 46% compared to the same period. Meanwhile, exports of processed and canned tuna products increased. The export value of processed and canned tuna products in the first six months of the year reached nearly USD 175 million, up 4% over the same period. However, this increase is mainly due to rising prices.

Regarding the market, tuna exports to main markets such as the US, Japan, Canada... have not shown any signs of recovery. Meanwhile, exports to the EU, Mexico, Israel and Thailand are recording high growth over the same period.

Tuna exports to the US continued to decline in June 2023, reaching only nearly USD 26 million, down 48% over the same period. Therefore, in the first 6 months of 2023, the value of tuna exports to the US is only half of the same period last year, reaching USD 143 million.

However, exports to the EU market increased continuously in the past 2 months. After growing in May 2023, tuna exports to the EU continued to grow in value in June, up 28% to more than USD 12 million. As a result, cumulatively in the first 6 months of 2023, tuna export turnover to the EU is equivalent to that of the same period last year.

Notably in this market segment is that exports to the Netherlands have continuously grown strongly in the last 2 months at 3 digits.

Source: Customs News