Vietnam’s shrimp export to the EU market make effective use of the EVFTA Agreement

The following article belongs to the website of The Ministry of Industry and Trade of Vietnam.

In the first months of 2021, Vietnam’s shrimp exports to the EU market recorded positive signals thanks to businesses making effective use of tariff commitments in the EVFTA Agreement.In the first months of 2021, Vietnam’s shrimp exports to the EU market recorded positive signals thanks to businesses making effective use of tariff commitments in the EVFTA Agreement.

According to statistics of the General Department of Customs, Vietnam’s shrimp exports to the EU in the second quarter of 2021 reached 18.62 thousand tons with a value of 159.45 million USD, up 68.9% in volume and 65.8 % in value compared to the first quarter of 2021, up 43.6% in volume and 42% in value over the same period in 2020.

In the first 6 months of 2021, Vietnam’s shrimp exports to the EU market reached 29.6 thousand tons with a value of 255.7 million USD, up 25.2% in volume and 27.5% in value compared to that of the EU market. in the same period of 2020. In which, shrimp exports to Germany accounted for 24.94% in volume and 26.22% in value; shrimp exports to the Netherlands accounted for 26.85% in volume and 25.29% in value; shrimp exports to Belgium accounted for 16.35% in volume and 16.45% in value; shrimp exports to France accounted for 8.74% in volume and 9.51% in value; Shrimp exports to Denmark accounted for 6.99% in volume and 7.23% in value.In the first 6 months of 2021, Vietnam’s shrimp exports to the EU market reached 29.6 thousand tons with a value of 255.7 million USD, up 25.2% in volume and 27.5% in value compared to that of the EU market. in the same period of 2020. In which, shrimp exports to Germany accounted for 24.94% in volume and 26.22% in value; shrimp exports to the Netherlands accounted for 26.85% in volume and 25.29% in value; shrimp exports to Belgium accounted for 16.35% in volume and 16.45% in value; shrimp exports to France accounted for 8.74% in volume and 9.51% in value; Shrimp exports to Denmark accounted for 6.99% in volume and 7.23% in value.

According to the Import-Export Department, the export price of Vietnam’s shrimp to the EU in the first half of 2021 averaged $8.63/kg, an increase of $0.16/kg over the same period in 2020. The reason is due to the quantity of shrimp. Exports that meet the requirements of tax reduction from the EVFTA have increased in recent months. This is a good signal for the price competitiveness of shrimp products in the EU market in the coming time.

In the first half of 2021, Vietnam’s shrimp exports to most major markets in the EU increased sharply compared to the same period in 2020 thanks to the following reasons: (i) Covid-19 epidemic in Vietnam is well controlled in the first period of the year, making an important contribution to making farming and processing for export more stable and favorable; (ii) Vietnam’s shrimp products have a better competitive advantage than before thanks to preferential tariffs from the EVFTA Agreement; (iii) EU shrimp consumption and import demand increased again in the first half of 2021. In the second quarter of 2021, shrimp exports to Poland, Italy, Sweden and Spain all increased to 3 shrimp. number compared to the same period in 2020 – the time when EVFTA has not taken effect.

Vietnam’s shrimp market share in the EU market has improved markedly (Exchange rate used in this article: 1 EUR = 1.18052. Source www.xe.com) According to Eurostat statistics, shrimp imports in the first 4 months in 2021 from the EU’s external markets reached 169.6 thousand tons with a value of EUR 1.01 billion, equivalent to USD 1.192 billion, up 5.7% in volume and down 5.4% in value, accounting for 67 .9% in volume and 73.5% in value of total EU shrimp imports. In which, Vietnam is the third largest shrimp supplier to the EU after Ecuador and India, accounting for 8% in volume and 10.5% in value, reaching 13.58 thousand tons with a value of EUR 106 million, equivalent to equivalent to 125.2 million USD, up 6.5% in volume and down 2.8% in value.

The EU shrimp import price from Vietnam in the first 4 months of 2021 averaged 7.82 EUR/kg, down 0.78 USD/kg over the same period in 2020. However, the current EU shrimp import price from Vietnam South is still higher than Ecuador and India shrimp prices. Accordingly, the price of EU shrimp imports from Ecuador and India in the first four months of 2021 was at EUR 5.05/kg and EUR 5.67/kg, respectively. This is the reason why Vietnam’s shrimp market share in the EU has not increased sharply despite enjoying incentives from EVFTA.The EU shrimp import price from Vietnam in the first 4 months of 2021 averaged 7.82 EUR/kg, down 0.78 USD/kg over the same period in 2020. However, the current EU shrimp import price from Vietnam South is still higher than Ecuador and India shrimp prices. Accordingly, the price of EU shrimp imports from Ecuador and India in the first four months of 2021 was at EUR 5.05/kg and EUR 5.67/kg, respectively. This is the reason why Vietnam’s shrimp market share in the EU has not increased sharply despite enjoying incentives from EVFTA.

The economies of EU member states are on the way to recovery thanks to the widespread vaccination and deployment of post-Covid support packages. Since the beginning of the second quarter of this year, foodservice stores in Europe have begun to reopen. Summer shrimp demand in Europe increases, shrimp stocks are at a low level. Meanwhile, the major suppliers to the EU, India and Indonesia, are facing many labor difficulties due to the impact of the Covid-19 epidemic, which will leave a large market gap in supply for the EU market. This is an opportunity for Vietnamese shrimp exporters to further promote shrimp exports to the EU in the late 2021 period. Especially, Vietnamese shrimp products enjoy many tax incentives from the EU. The EVFTA and Vietnam’s shrimp export results in the past time show that the prestige and brand of Vietnamese shrimp in the EU is increasing compared to the time before the EVFTA took effect. However, the price of Vietnamese shrimp products in the EU market is still higher than that of India and Ecuador despite taking advantage of tax incentives from the EVFTA. This is still a big challenge for Vietnamese shrimp exporters. On the other hand, Vietnam’s largest aquaculture and seafood processing areas in the Mekong Delta are facing complicated developments of the COVID-19 pandemic, which significantly affects shrimp exports in the upcoming period of time.

EVFTA’s tax schedule for shrimp As soon as the EVFTA comes into effect, the export tax on some Vietnamese shrimp products to the EU will be 0%:
– Shrimp HS code 03061100 (chilled green lobster; frozen HOSO, DP black tiger shrimp; fresh frozen PD iron shrimp; shelled, whole, frozen split-cap shrimp, etc.) from the current level of 12.5%.
– Shrimp HS code 03061710 (frozen PD tiger shrimp, frozen HOSO whole tiger shrimp, frozen fresh black tiger shrimp, frozen black tiger shrimp, frozen fresh HLSO black tiger shrimp, IQF frozen black tiger shrimp, frozen white shrimp… ) from the current level of 20%.
– Shrimp HS codes 03061791, 03061792, 03061793, 03061799 from the current 12%.
– After 5 years: shrimp with HS code 03061794 will be reduced to 0% from 18%.
– After 7 years: shrimp with HS code 16052110 (shrimp in paste form) and shrimp with HS code 16052190 (other shrimp) will be adjusted from 20% to 0%.

In the last months of 2021, consumption demand in the EU is on the rebound, plus the special preferential tariffs from the EVFTA will continue to facilitate the increase of Vietnam’s seafood products. competition in the EU market. However, the developments of the Covid-19 epidemic in domestic and foreign markets along with the effects of the IUU yellow card will continue to be the factors that have the greatest impact on Vietnam’s seafood exports to this market. Currently, production, farming and processing of aquatic products are facing many difficulties in the context that the disease is spreading strongly in many localities across the country. Therefore, it is necessary to promptly implement necessary support measures for the recovery and stabilization of production and export, to support enterprises to overcome difficulties and make good use of market opportunities in the coming time. .In the last months of 2021, consumption demand in the EU is on the rebound, plus the special preferential tariffs from the EVFTA will continue to facilitate the increase of Vietnam’s seafood products. competition in the EU market. However, the developments of the Covid-19 epidemic in domestic and foreign markets along with the effects of the IUU yellow card will continue to be the factors that have the greatest impact on Vietnam’s seafood exports to this market. Currently, production, farming and processing of aquatic products are facing many difficulties in the context that the disease is spreading strongly in many localities across the country. Therefore, it is necessary to promptly implement necessary support measures for the recovery and stabilization of production and export, to support enterprises to overcome difficulties and make good use of market opportunities in the coming time.

Visit the Special EVFTA with Vietnam Trade Issue Q2/2021 here to learn more about the situation of seafood exports to the EU market in the first 6 months of 2021.

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