Pangasius exports will grow thanks to EVFTA

Pangasius exports to some key markets in the first half of 2019 decreased. From the third quarter, pangasius exports are forecast to expand again.   

Pangasius processed for export.

Pangasius exports decline

According to Vietnam Association of Seafood Exporters and Producers, from March to June, the export value of pangasius decreased by 6-17.6% compared to 2018. By the end of June 2019, the total export value of pangasius reached USD 961.6 million, down 4.1% compared to the first half of 2018.

Exports to the US, Brazil and Colombia sharply decreased, leading to the general decrease. However, in the third quarter, pangasius exports are forecast to expand again. However, it will not exceed 15% compared to 2018.

In the first half of the year, exports to China-Hong Kong market tended to grow slower than previous years. As of the end of June 2019, the total value of pangasius export to this market reached USD 254.3 million, up 1.2%, accounting for 26.4% of the total value of pangasius exports. This shows that most of Vietnam’s pangasius is still exported to China - Hong Kong after exports to the US decreased.

The fallin pangasius export to the US market in early 2019 has increased the pressure on major markets. Particularly, businesses increased exports to the EU. In the first half of this year, the value of pangasius exports to EU reached USD 138.5 million, up 18% and accounting for 14.4% of total export value of pangasius.

Export value to four single markets, including Netherlands, the UK, Germany and Belgium respectively increased by 0.7%,46%, 51.3% and 35.2% compared to 2018. Currently, manyVietnamese enterprises have exported frozen pangasius fillet productsto the EU, so the average export price is not high. Only the Netherlands grew, with many pangasius products achieving the highest added value in the region.

Benefits thanks to EVFTA

As forecast, in the third quarter of 2019, Pangasius exports to the EU continueto maintain the growth rate as in the first two quarters. After the effective date of the EVFTA, Pangasius exportswill have more opportunities inthis market.

The two major pangasius products are fresh and chilled pangasius fillet product (HS code 030432), the tax rate will be reduced from 9% to 0% after three years of the effective date of the EVFTA. For frozen pangasius fillets (HS code 030462), the tax rate will be reduced from 5.5% to 0% after three years of the effective date of the EVFTA. The tax rate of frozen pangasius product (HS code 030324) will fall from 8% to zero within three years.

Germany is one of the pangasius import markets with high pricesin the EU. According to ITC statistics, in the first four months of 2019, the average import price of frozen pangasius fillets (HS code 030462) ranged from 3.5 to 3.96 USD/kg.

Currently, there are about 15 pangasius exporters to Germany. These exporters are in the two provinces of Dong Thap and Can Tho. Frozen pangasius fillet exports account for over 90% of Pangasius exportsto Germany.

Particularly in the US market, as of the end of June 2019, the total value of pangasius exports to this market reached USD 141.9 million, down 27.9% compared to 2018. In June 2019, the value of pangasius exports to this market sharply decreased to 40.8%. The dumping tax increase in the 14th administrative review period (POR14) has significantly affected the export of Vietnamese pangasius to this market.

In April 2019, the US Department of Commerce (DOC) announced the final results of POR14 for Vietnamese pangasius shipments imported into the US from August 1, 2016 to July 31, 2017. This final tax rate is much higher than the preliminary result published in September 2018. According to the forecast of VASEP at the end of the first quarter of 2019, the value of export pangasius to the US may drop sharply after the announcement of the tax rate of POR14. In the third quarter of 2019, the Pangasius export value to this market may increase compared to 2018.

For ASEAN, in the first half of this year, thePangasius export value to this market reached USD 100.8 million, up 7.9% compared to 2018. In particular, export value to Thailand increased by 9.7%; Philippines increased by 11.8% and Malaysia increased by 33.4% compared to 2018. ASEAN is a potential market that Vietnamese enterprises need to pay attention to. The Pangasius export value to this market is expected to be positive in the third quarter.