Overcoming the yellow card, shrimp exports to the EU still grow well

Although certainly affected by the IUU yellow card, shrimp exports to the EU market maintains a good growth

Shrimp processing for export

EU – a potential market

According to the Vietnam Association of Seafood Exporters and Producers (VASEP), the EU is still the largest importer of Vietnamese shrimp, accounting for 18.2% of Vietnam’s total shrimp exports. Shrimp exports in the first four months of 2018 rose by 17%, nearly US$ 1 billion. In which, shrimp exports to the EU market accounted for more than 18%, up by 13.5% over the same period last year. Exports to the three main markets (Netherlands, Germany and Belgium) gained double-digit growth. Exports to the Netherlands and Germany increased by 76.3% and 55.3%, respectively, while Belgium by 18.9%.

Shrimp exports to the EU in the first months of this year still maintain the growth momentum of 2017. Shrimp exports to the EU market is quite favourable due to India which is Vietnam's competitor meeting difficulties in this market, so Vietnamese shrimp is preferred.

With increasing demand for consumption due to better economic growth than forecast, some products such as processed white shrimp, fresh / frozen sugpo prawn will still keep strong export growth to the EU in the near future.

Statistics show that the EU is the leading market for Vietnam's seafood industry in 2017 with a turnover of US$ 1.5 billion, of which shrimp was high potential item.

In 2017, although Vietnamese seafood exports to the EU market faced two major problems which were the smear by media from the beginning of the year that affected the pangasius exports, and the EU “yellow card” warning about illegal, unregulated and unreported fishing, the total exports to the EU in the year still gained a positive result thank to a sharp increase in the shrimp exports.

Besides, Vietnamese shrimp is entitled to GSP tariffs from the EU that Thailand and China are not entitled to, and are more affordable than its competitors. At present, the EU GSP tariff for Vietnam on frozen raw shrimp (HS 030617) is 4.2%; frozen processed shrimp (HS 160521) is 7%.

Benefits from EVFTA

According to experts, the Vietnam Free Trade Agreement with the European Union (EVFTA) is going to be effective. Under the agreement, Vietnamese goods, including shrimp shall be entitled to special preferential tariffs.

The EU market mainly imports frozen raw shrimp and processed shrimp from Vietnam. As committed, as soon as EVFTA comes into effect, the export duty on raw shrimp HS code 03061100 to the EU will be 0% from the current rate of 12.5%, shrimp products HS code 03061710 will be 0% from the current rate of 20%.

For processed shrimp products, shrimp HS 16052110 (shrimp paste) will be adjusted from the current tariff rate of 20% to 0% after 7 years from the date of entry comes into force in the Agreement; shrimp HS 16052190 (other shrimps) will be adjusted from 20% to 0% after 7 years from the date of entry comes into force in the Agreement.

The EU accounts for about 30.6% of the World’s total shrimp import value. The EU shrimp imports range from US$ 6-8 billion per year. In the 10 years (2007-2017), shrimp imports into the EU increased from US$ 5.6 billion to US$ 6.9 billion in 2017.

On the EU market, Vietnam has to mainly compete with India and Ecuador. While India tends to reduce shrimp exports to the EU due to some difficulties, Ecuador is increasingly promoting shrimp exports to the market. Ecuador has more advantages than Vietnam in shrimp production and now enjoys the preferential tariff of 0% from the previous rate of 3.6%.

According to experts, during the process of EVFTA approval, enterprises need to actively grasp the commitments of Vietnam and partners to have an appropriate export plan.

The EU is one of the markets with many strict technical requirements for protecting the best human health, environmental protection, sustainable development. Therefore, enterprises need to meet the requirements well on food safety and hygiene to access the market, especially when EVFTA comes into effect with tax opportunities.

It is predicted that 2018 will be a promising year for shrimp products in the European market. In contrast, although pangasius was a major product, for over three years export volume has declined significantly. However, Vietnamese enterprises are still determined to