The Vietnam Association of Seafood Exporters and Processors (VASEP) has recently put forth a proposition to the government regarding the shrimp export sector. In light of the challenges faced by Vietnamese shrimp exporters in the South Korean market, VASEP advocates for the elimination of export quotas.

Market Downturn and Regulatory Hurdles

Statistics reveal a concerning downturn in Vietnam’s shrimp exports to South Korea, plummeting by 27 percent to USD 343 million in 2023 compared to the previous year. VASEP attributes this decline to various factors, including the adverse effects of inflation and escalating interest rates. Heightened financial strain prompted South Korean consumers to tighten their expenditure, leading to surplus inventories and diminishing demand for Vietnamese shrimp.

Compounding these challenges is the export quota stipulated in the Vietnam-South Korea Free Trade Agreement (VKFTA) of 2015. While the agreement has undeniably bolstered Vietnamese exports to South Korea across various seafood segments, including shrimp, squid, and octopus, the imposed quota poses a significant hindrance. With an annual shrimp export quota limited to 15,000 tonnes, Vietnamese exporters often exceed this volume, subjecting South Korean importers to additional costs ranging from 14-16 percent. Consequently, inflated prices of Vietnamese shrimp hinder competitiveness and impede market expansion efforts.

The Imperative of Quota Removal

Recognizing the imperative of aligning trade regulations with evolving market dynamics, VASEP emphasizes the necessity of revising the VKFTA in 2024 to abolish the shrimp export quota to South Korea. Projections indicate a sustained increase in South Korea’s demand for fishery products amid constrained supply. Against the backdrop of waning consumption in Western markets and escalating tensions in transportation routes to the US and Europe, South Korea emerges as a promising destination for Vietnamese seafood exports.

In addition to regulatory advocacy, VASEP underscores the pivotal role of enterprise-driven initiatives in enhancing market competitiveness. Enterprises are urged to prioritize product quality enhancements and ensure stringent adherence to food hygiene and safety standards. By fortifying product integrity and aligning with discerning consumer preferences, Vietnamese exporters can cultivate consumer trust and seize growth opportunities in the South Korean market.

Ambitious Export Goals

Vietnam has set ambitious targets for its shrimp export sector, aiming to achieve a export value of USD 4 billion in the current year, marking a 5 percent increase from 2023. However, attaining these objectives hinges upon regulatory reforms that foster a conducive export environment, empowering Vietnamese exporters to navigate market complexities and realize their full potential in the competitive global seafood arena.