Vietnam’s tuna exports poised for a comeback

The higher prices have created a critical shortage of fresh tuna loins as raw material in the tuna industry, resulting in the Seafood Processing Industry Association of the EU calling for a 0% percent tariff on loins in a bid to boost its supply.

More acutely, the shortage has spilled over and created an elevated demand for canned tuna as the EU tuna fishing fleets opt to sell their catch in higher price markets like Japan and the US, leaving the EU canning industry in a vacuum unable to meet demand.

The European Fish Processors Association (AICPE-CEP) recently issued a press release in Brussels in which it said insufficient access to raw material (tuna loins) will put EU jobs and economic growth at stake if tariff quotas are not increased.

According to the Vietnam Association of Seafood Exporters and Processors (VASEP), in the two months leading up to March, exports of tuna loins for processing in the EU jumped 11.8% on-year to$15.7 million.

In addition, exports of canned tuna for the period, the main product that Vietnam exported to the EU market during the two month period, surged by 84% when compared to the corresponding period last year.

In descending order– Germany, Spain, Italy and the Netherlands were the largest importers of Vietnam’s tuna for the January-February period. Spain's was the fastest growing import market,skyrocketing 125% on-year to US$2.6 million, followed by Germany at US$5.6 million, up 63.7%.

Spain produces 67% of all canned tuna sold in the EU and is highly dependent on global imports of raw material to meet its demand.For the period, Vietnam was the largest supplier of to Spain with exports spiking 125% over last year to US$2.6 million.

The EU tuna processing industry in Spain, France, Italy and Portugal are the major canned tuna producers in the EU the VASEP said, adding that they rely heavily on imports of raw materialand this trend is forecast to continue throughout 2015.

Benefits from TPP

VASAP has also  predicted that 2015 will be a good year for tuna exports on the back of the formation of the ASEAN Economic community (AEC) later this year and other free trade agreements that are poised to come into effect.

As these agreements are realised, Vietnamese businesses in the tuna industry will have more opportunities to enter global markets.

It cites the case of Sustainable Seafood Limited Company, which has set its goal to realise over US$12 million in sales by shipping 1,200 metric tonnes of tuna overseas in 2015, which would be up 20% in volume and 30% in value compared to 2014.

Previously, the company principally exported products to the US and Japan but now it is concentrating solely on breaking into and getting a strong foothold in the US market.

The US market, on the other hand, is a tough one as competition against Thailand, the Philippines and Indonesia has become fiercer, a company representative said adding that it considers the US as the gateway to the Canadian, South American and Mexican markets.

As opportunities are available, Vietnamese businesses need to establish solid supply chain links with fishermen to improve tuna quality so that the industry can generate US$600 million in 2015 as targeted VASEP reported.

VASEP did caution, however that there is a risk that if the euro continues to depreciate, tuna consumption in the EU might decrease, causing canned tuna imports to decline.

On balance all this adds up to potentially very good news for Vietnamese seafood exporters that have been struggling with international competition and quality issues for the past several years and it could well be an omen of good things to come.