Enterprises proactively raw material source, tuna exports will reach US$1 billion

Vietnam has become the 5th largest tuna exporter on the world tuna export ranking, businesses expect that tuna exports will recover and hit the US$1 billion in 2024.

Returning to the US$1 billion milestone

10 years ago, Vietnam was only ranked 8th on the world tuna export ranking, but by 2023 Vietnam ranked 5th, just behind Thailand, Ecuador, Spain and China.

And the remarkable milestone is the record of US$1 billion in tuna exports in 2022, showing the development potential of Vietnam's tuna processing and export industry. Vietnamese enterprises have tuna processing factories with high technology, experience, skills, and reputable products in hundreds of markets.

Ms. Cao Thi Kim Lan, General Director of Binh Dinh Seafood Joint Stock Company shared: "With more than 30 years of experience in the tuna industry, I believe that the potential and space for the Vietnamese tuna industry is much greater if we strive to overcome internal challenges and resolve difficulties with the attention and support of state management agencies.”

According to a report by the Vietnam Association of Seafood Exporters and Producers (VASEP), by the end of May 2024, tuna exports reached US$388 million, an increase of 22%, estimated to reach US$457 million in the first half of the year. Tuna exporters expect that perhaps by 2024, Vietnamese tuna will have a chance to return to the US$1 billion milestone if the inadequacies on raw materials are resolved.

According to statistics from the US Department of Agriculture, Vietnam is currently the second largest source of canned tuna for the US market, accounting for 16% of the country's total import volume, behind Thailand.

Although the US is increasing imports of canned tuna from Vietnam, the country's total imports in the first quarter of 2024 are decreasing slightly over the same period, reaching only nearly 33,000 tons. The reason is that the US reduced imports from Thailand, the largest source of tuna for this market, accounting for 51% of the total import volume

Highly dependent on imported raw materials

According to VASEP, in the structure of tuna export value in recent years, more than 50% of the value is created from imported raw materials because domestic production does not meet the demand for export processing and is unstable.

Regarding this, many businesses in the tuna industry reported difficulty in obtaining raw material certification (S/C), although businesses have increased working with agencies and inspected thoroughly, but Still extremely nervous after finishing purchasing the ingredients.

There are many reasons why businesses cannot receive S/C after purchasing raw materials due to some problems in the previous stages that are difficult for businesses to know clearly, such as the issue of confirming food safety conditions for fishing vessels or the issue of fishing vessels operating in waters that do not comply with regulations... Although these fishing vessels are still allowed to operate on the sea normally, are inspected and allowed to dock normally.

Or a situation that occurred in the last 2-3 months, quite a few fishing vessels installed monitoring systems via the telecommunications network continuously have errors, causing the fishing vessels to lose connection to cruise monitoring for six hours or more, some vessels take up to 2-3 days - directly affecting the S/C application of enterprises.

From the above reality, businesses recommend that provinces and cities implement effectively and promptly the confirmation of food safety conditions for fishing vessels and fishing ports according to regulations as well as strictly implementing the granting of permit of departure and arrival of fishing vessels when they do not meet conditions prescribed by law;

The Ministry of Agriculture and Rural Development should consider amending regulations so that S/C can be issued immediately to businesses when they have completed loading and unloading of raw materials from fishing vessels under the supervision of port staff in terms of type, volume... at fishing ports; provide guidance and direction on handling S/C for cases where fishing vessels lose connection due to confirmed errors by service provider.

According to Ms. Cao Thi Kim Lan, looking back 10 years ago, Vietnam's tuna industry only had a few small businesses, all raw materials imported from other countries had to be "bought back" through many foreign intermediaries with high price and raw material costs. To date, Vietnamese businesses have formed a "billion-dollar" tuna industry, ranking among the top in the world. Businesses have grown in both scale and technology and are capable enough to dominate the global market, especially the raw material supply market.

The decisive factor for the development of the tuna industry. Businesses have moved towards "directly purchasing raw materials from fishing vessels from countries on international waters", skipping intermediaries, shortening the supply chain, thereby significantly reducing input material costs. This is a decisive factor in global competitiveness that not every country can do like Vietnam.

Every year, Vietnam welcomes an average of over 20 foreign fishing and freezing ships transporting hundreds of thousands of tons of raw tuna directly into Vietnam to sell to businesses. The raw material supply chain in Southeast Asia has shifted to Vietnam instead of only Thailand as before.

Vietnam is currently a preferred destination for global raw material suppliers because Vietnamese businesses have large production capacity, superior technology and, above all, a flexible and open raw material import policy, preferential tariffs, facilitation of import procedures, that have created reputation with major suppliers.

Source: Customs News