Date: July 2015

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1. Key words .............................................................................................................................. 2

2. Abstract .................................................................................................................................. 2

3. Introduction ........................................................................................................................... 2

4. Sector Overview .................................................................................................................... 3

5. Specific for the sector ........................................................................................................... 3

6. Opportunities for Danish companies ................................................................................ 7

7. Conclusions and recommendation ..................................................................................... 8

Vietnam, fishery, fish, seafood, pangasius, shrimp, tuna, export, import.

This report gives an overall picture of the fishery sector in Vietnam as it shows the

current status of the sector as well as its development trends. The report illustrates

Vietnam’s strengths and weaknesses in the fishery sector together with prevailing

Government policies for this sector, identifying opportunities for Danish business for

investment and development of the sector.

The fishery industry is one of the pioneering industries in the innovation and

transformation of Vietnam’s economy. The Vietnamese fisheries sector makes a

substantial contribution to the economy and has had a major impact on reducing

poverty in Vietnam, especially as majorities of the Vietnamese population work in the

agricultural sector.

With the sustainable growth within the sector, Vietnam’s export from fishery products

have showed a considerable increase since the 2000s to become a major income earner

for the Vietnamese population and one of Vietnam’s major export commodities.

Together with crude oil, textile and garments, fishery products are the most important

exports in Vietnam. Since 1990s, fishery products have always been in the top three of

biggest exported commodities.

With various favorable and ideal conditions, the fishery sector still, and for the nearest

future, shows a lot of potential for growth and to become a key industry and a

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momentum for the country’s economic growth. Hence, the fishery sector in Vietnam

offers good business opportunities for Danish and International enterprises.

Vietnam - with its coastline of over 3,260 kilometers and more than 3,000 islands

scattered offshore, together with 2,860 rivers and estuaries - has been geographically

endowed with ideal conditions for the development and growth of the fishery sector.

The great potential of the fishery sector in Vietnam is embedded in 811.700 ha of

freshwater and 635.400ha of brackish water.

In 2014, Vietnam exported seafood to 166 markets, earning US$ 7.84 billion, rising

16.5% year on year and surpassing 12% compared to the target US$ 7 billion. The

increase in 2014 was attributed to the gain in shrimp export turnover. The productions

and exports of other fishery products were also reported increasing in comparison with

the previous year except for tuna export.

Production

The total production of fishery products in 2014 was 6,311 thousand MT, increasing

4.8% in comparison with the previous year with the raise in both capture and

aquaculture production.

Source: VASEP, 2014

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Fisheries production of Vietnam in 2013 and 2014 (thousand MT)

2013 2014 Variation (%)

Total Production 6,020 6,311 4.8

Capture Production 2,804 2,918 5.2

Marine catch 2,607 2,712 5.5

Inland catch 197 306 1

Aquaculture production 3,216 3,393 4.5

Source: VASEP, 2014

The capture production in 2014 was estimated to reach 2,918 thousand MT, up 4.1

percent year on year in which marine catch gauged to reach 2,712 thousand MT, up 4

percent.

Thanks to favorable weather conditions and incentive policies to help fishermen build

offshore fishing vessels with high capacity, the capture production of high value species

such as mackerel, tuna, squid, anchovy in 2014 was at high level. The management,

capture and protection of fishery resources were also intensified by government and

local authorities. Activities in purchasing, processing and logistics were increasingly

receiving a lot of investments, contributing to the better quality of post-harvest products.

Export

Total export in fishery sector of Vietnam is reported with continuous growth over the

last 15 years. In 2014, the total exports were US$7.84 billion, generating an year-over-

year growth of 16.5%.

In 2014, exported seafood products of Vietnam reached 166 markets. Among these, top

10 importing markets for Vietnam seafood accounted for up to 86% of total export

value. The U.S, Japan, South Korea and China remained to be preferred markets for

fishery products of Vietnam.

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Source: VASEP, 2014

Accounting for a half of total seafood products export in 2014, shrimp exports remained

the positive growth of 2013 and to be the key export product of seafood sector of

Vietnam. Other main products for export of Vietnam’s fishery sector include pangasius

(22% of total value), other fish (13%) and mollusk (7%).

Source: VASEP,2014

1. Continue in growth of Shrimp export

Shrimp export accounted for up to 50% of total export value of Vietnam with

nearly US$4 billion worth of export value. The U.S. remained to be the largest

importer which contributed to over 27% of export turnover of Vietnam’s total

shrimp export.

Vietnam benefited from the growth in export of white leg shrimp, which hit US$

2.31 billion of export value and accounted for 58% of total shrimp export. Black

tiger shrimp export also contributed to US$ 1.38 billion, accounting for 35% of

total export value of this product.

The continued growth in shrimp export was partly due to reduction in shrimp

yield of some competitor of Vietnam like Thailand and China. However, in

2014, shrimp exporters in Vietnam had to face with challenges coming from high

duty rate and antidumping duty of the U.S. market, economic depressions

occurred in several key import markets and the devaluation of yen currency of

Japan.

Shrimp export is forecasted to increase in the first half of 2015 but the growth

rate will remain in the vicinity of that of 2014. This is resulted from the impacts

of POR8 anti-dumping tax imposed by the U.S.’s government and the recovery

in production of shrimp from several main competitors like Thailand, China and

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India.

2. Uncertain trend on pangasius export

Pangasius are raised in freshwater bodies in Mekong Delta, along the Mekong

River. Nowadays, they are farmed in ponds with pellet feeds. Pangasius export is

the second main export fishery product of Vietnam after shrimp.

In 2014, Vietnamese pangasius exports had a worth of US$1.76 billion, the same

value as those of 2013, accounting for 22% ot total export value of seafood

sector. EU and the U.S. were the two largest importers of Vietnam’s pangasius

products which together made up for 41% of total export value of this products.

However, pangasius sales to these two markets showed trend to decline due to

high anti-dumping duty POR10 in the U.S’s market and lower importing demand

for white meat fish, stricter inspection on chemicals and antibiotics in EU’s

market. This resulted to the shifts in export markets among Vietnam’s pangasius

exporters to potential markets like China, Mexico, Brazil and ASEAN.

Due to the lack of recovery signs in demand for pangasius products, it is

expected that in 2015 export of the product will remain unchanged or slightly

decline and will not show sign of recovery until second quarter of 2015 after

some international seafood exhibitions and trade fairs.

3. Huge decline in tuna export

In 2014, tuna sales continued to drop by 8.1% to just US$ 484 million, following

the downward trend in 2013. Deep plunges were seen in exports of two kinds of

tuna products – frozen/fresh and canned tuna.

The decline in sales of tuna products oversea was due to low quality of raw tuna

for premium processed products. Tuna exports to Japan saw the sharpest decline

due to the devaluation of yen. Tuna exports were also subjected to strict

requirements on sustainability and traceability. Importing demand from main

markets, such as Japan, the U.S. and EU, also contributed to the decline in tuna

export value of Vietnam in 2014.

Forecasts say that tuna export in 2015 may generate some positive outcomes

with the recovery in demand of major markets like the U.S. and Japan. Vietnam’s

exporters of tuna will also have plan to increase quality of tuna products, making

the price to slight increase. Total tuna export in 2015 is forecasted to grow by

5% from 2014, which worth US$ 510 million of export value.

Import

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In order to meet demand for oversea exports, Vietnam’s seafood companies increased

imports of raw fish to supply for outsourcing, processing and exporting activities.

Seafood products were imported from 97 suppliers globally, totaling up the value of US$

953 million, of which shrimp imports accounted for the highest proportion of 45.4%.

Other main import products were tuna (US$ 167 million – 12.4%), marine finfish (US$

276 million – 33.9%).

India stood out as the main supplier of seafood products for Vietnam. Key items

imported from India included shrimp and tuna, valued at US$ 321 million. Taiwan and

Norway were also among top suppliers of seafood products for Vietnam’s market.

Source: VASEP, 2014

MAIN SEAFOOD SUPPLIERS TO VIETNAM, JAN – NOV 2014

No. Suppliers 2013 2014 Variations (%)

1 India 113,074,383 320,838,849 183.7

2 Taiwan 66,803,459 67,649,310 1.3

3 Norway 51,392,720 55,170,007 44.8

4 Japan 21,889,561 39,417,356 7.3

5 Indonesia 21,889,561 39,417,356 80.1

Source: VASEP, 2014

With various advantage and ideal geographical locations, Vietnam’s fisheries sector in

years to come still plays a very important role in the country’s economy and is still be

one of the main driving forces of the economy.

Despite the growth in demand of domestic market, most of the fishery products are for

export. And the potential of Vietnamese fishery sector is still expected to develop as it is

restricting and diversifying its market toward various export markets. Together with the

plan to improve product quality and profitability toward a more sustainable and

responsible development in the fishery production, Vietnam will continue to demand

more supports and initiatives within the sector from foreign investment including

Denmark, especially when the Fisheries Sector Program (FSPS) has now entered a

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phase-out period in which both Vietnam and Denmark are working closely to build up a

new partnership and the new focus is now on promoting sustainable fisheries business

links between Danish companies and Vietnamese fish producers.

In the upcoming year, Vietnam need to work on with the technological and

environmental issues in fishery sector since the catching and aquaculture have been

bringing about a lot of damages to the environment. With a view to sustainable

development, there will be an increase in the demand for high technology from

developed countries including Denmark which cannot only boost the productivities but

also reduce the harm of the industry to environment. Besides, since the main markets of

Vietnamese fishery products are still the EU, the USA and Japan where the requirements

in food safety and technical specifications are extremely high, Vietnam still needs to seek

for solutions and modern technologies that can help their fishery products meet those

requirements.

In addition, it is expected that in 2014, there will still be a scarcity in tuna, cephalopod

and other marine products as raw materials for processing. Therefore, by exporting raw

materials to Vietnam to process and re-importing, Denmark companies may benefit

from making use of low cost of labor.

Besides, since almost all fishery companies in Vietnam are in small and medium scale,

capital is also one of their biggest problems in investment and reinvestment as well as in

the improvement of new technology. As a result, it is still a good chance for Danish

companies to invest in the fishery sector in Vietnam.

In the past decade, Vietnam has emerged as the largest aquaculture in Southeast Asia.

This has been achieved by Government strategies toward transforming from small

capture fisheries toward export-oriented aquaculture. Besides, Vietnamese government is

taking initiatives to build a more sustainable and develop the quality of fisheries product

in the long term. With the high potential for growth and development, the fisheries

sector in Vietnam is still an attractive destination for Danish companies to invest in.

The Trade Council is a part of the Ministry of Foreign Affairs and is the official export and investment promotion agency of Denmark. The Trade Council benefits from around ninety Danish Embassies, Consulates General and Trade Commissions abroad. The Trade Council advises and assists Danish companies in their export activities and internationalisation process according to the vision: Creating Value All the Way. The work in the Trade Council follows specific procedures and quality guidelines. In this way our customers are secured the best possible quality under the varying working and market conditions at any given point of time.

Ministry of Foreign Affairs of Denmark Embassy of Denmark in Vietnam 7th floor, BIDV Tower 194 Tran Quang Khai Hoan Kiem, Hanoi Tel: +84 4 823 1888 Fax: +84 4 823 1999 E-mail: hanamb@um.dk www.vietnam.um.dk