In 2024, the global seafood export market is anticipated to surge to USD 9.5 billion, marking a significant 6% uptick from the previous year. This growth trajectory, however, is not devoid of hurdles, as highlighted by industry experts.

Geopolitical Fluctuations and Trade Sanctions

According to Ms. Le Hang, Director of Communications at Vietnam Association of Seafood Exporters and Producers (VASEP), trade sanctions between the EU, US, Russia, and China are posing challenges, while agreements with Japan are poised to strain local seafood supply chains, potentially leading to inventory shortages in major markets.

Amidst the turmoil in the Middle East, the seafood sector braces for disruptions in global trade. Instability in the Red Sea has impeded transportation, prompting shipping route alterations, elongating journeys, and resulting in steep rises in freight rates. Moreover, the Panamanian drought has compelled a reduction in canal traffic, compelling vessels to detour via the Cape of Good Hope.

Rising Transportation Costs and Pricing Pressures

As of January 1, 2024, several shipping lines have announced freight rate hikes to key export markets like the US and Europe, adding to the financial strain on seafood export businesses. Sao Ta Foods anticipates downward pricing pressures on finished seafood products in the first half of the year, mirroring the sluggish pace of global economic recovery.

Ms. Hang foresees a potential pivot in Vietnam’s seafood export landscape towards products with longer shelf lives and lower transportation costs, catering to evolving consumer demands. China emerges as an attractive market for Vietnamese exporters due to proximity and logistical advantages, especially amidst reduced supply from Ecuador.

Focus on Quality and Production

Amidst stiff competition from rival producers, shrimp industry businesses are advised to prioritize quality control during the farming stage to enhance product stability and competitiveness. Minh Phu Seafood Corporation is poised to bolster shrimp production through operational expansions, setting a promising tone for the industry.

With shrimp and pangasius leading Vietnam’s seafood exports, the industry is primed for recovery in 2024, particularly in the latter half of the year. Projections by SSI Research hint at substantial profit growth of 20-30% compared to 2023, signaling favorable prospects for stakeholders in the seafood sector.