Exports to EU “dropped”
According to the Vietnam Association of Seafood Exporters and Producers (VASEP), 2 years after EC (European Commission)’s “yellow card” warning posted on the Vietnamese fishery and exploiting aquatic products, Vietnam’s seafood exports to Europe (EU) has declined drastically, from the 2nd largest market, accounting for 18% of Vietnam’s total seafood export, to the 5th position with nearly 13% of the total seafood export turnover of Vietnam.
According to Mr Dang Thanh Pha – Purchasing Director of Phillips Seafood Vietnam Co., Ltd, before this “IUU (Illegal, Unreported & Unregulated fishing) yellow card”, his company exported about 300 tons of crabs to the EU every year, but now they must terminate the orders since most of the crabs are caught by small vessels which don’t enter large ports, therefore these ships are unable to acquire the Port’s certificate of origin, which makes it not possible for the company to prepare LCs according to EU requirements.
On the other hand, Binh Dinh Seafood Joint Stock Company fully meets the requirements of the EU on the origin of their tuna. However, due to the influence of the “yellow card” of IUU, every container of goods going to the EU has then been stopped for inspection by the importing country’s authorities. Previously, exports to the EU accounted for 60-79% of the total exports turnover of the company, but it reduced to only about 40% (in 2019, the export turnover to the EU was about $30 million), especially because of the COVID–19 pandemic, this index is now only at about 30%.
“The delays can last up to 20 days, resulting in overdue deliveries, which cause many partners to turn to find new suppliers from other markets. On the other hand, these inspection stops incur additional costs. Companies, whose profits being heavily affected by those costs, has to proactively search for new substitute markets. “The reduction of seafood exports to the EU is a ‘waste’ “, said Ms Cao Thi Kim Lan – General Director of Binh Dinh Seafood Joint Stock Company – a member of VASEP.
Great opportunity from EVFTA
Mr Tran Van Linh – Chairman of Thuan Phuoc Seafood Joint Stock Company cum Chairman of Da Nang Fisheries Association – indicated that Vietnamese seafood has a huge competitive advantage in the European market: “We have rich and diverse resources of tropical seafood, outperforming the quality of those in the EU. Besides, in the ASEAN, there are only Vietnam and Singapore to have concluded FTA negotiation with the EU. Whilst Singapore’s advantage is not seafood, the opportunity in this segment is now Vietnam’s”, Mr Linh said, “We also have advantages regarding price constituents, the technology used in Vietnam’s seafood processing is among the most advanced in the world, or human resources (manual) are abundant. This contributes greatly to improving the added values of the product”.
According to Mr Linh, the EU is a market with a good and stable profit margin; however, the import tariffs on fishery products to the EU is steep (ranging from 8 – 18%), so if EVFTA is approved, it will be a great opportunity for Vietnamese seafood exports to breakthrough. “Take Thuan Phuoc for example, we expect an increase of about 8 – 10% in profits in the case of good use of EVFTA”.
Ms Cao Thi Kim Lan expects EVFTA to be the “steroid” to stimulate seafood exporters thriving to account for more market share in the EU. “EVFTA, if approved promptly, will have positive impacts on seafood exporters in terms of reconfiguring the market and seizing advantages of the preferential tariffs of the agreement,”. From the perspective of VASEP, Ms Lan said that EVFTA will help Vietnam’s seafood export turnover to sharply increase and bring the EU back to the position of the second-largest or even the largest export market of Vietnam, given the removal of the IUU yellow card is timely in effect.
“Even though we genuinely want to reenter the EU market, we still have no plans of penetration in 2020. However, if there is a solution to IUU issue and especially if EVFTA is approved, we will definitely try our best to ‘open the door’ to enter this market,” Mr Dang Thanh Pha shared.
Translate & Edit: Hagen & KC