11 May 2023

Every year, Korea imports over 100,000 tons of shrimp with a value of $800 million - $1 billion. In which, Vietnamese shrimp products always account for the highest market share of over 50%.

Shrimp is the main export seafood product of Vietnam and the annual export turnover of this item accounts for 40-45% of the total export turnover of the whole seafood industry. Currently, Vietnamese shrimp is exported to 100 countries, of which the 5 largest markets include: Europe, the United States, Japan, China and Korea.

Accounting for 14% of Vietnam's total shrimp exports, just behind the US, EU and Japan, Korea is one of the important export markets of Vietnamese shrimp products.

Every year, Korea imports over 100,000 tons of shrimp with a value of $800 million - $1 billion. In which, Vietnamese shrimp always accounts for the highest market share of over 50%.

Vietnam shrimp products enjoy the highest market share in Korea

In 5 years (2018 - 2022), Vietnam's shrimp exports to the Korean market grew quite steadily from 386 million USD in 2018 to 468 million USD in 2022, up 21%. In particular, whiteleg shrimp products exported to South Korea have grown continuously from 2019 up to now.

In 2022, Korea is a market with stable shrimp consumption demand, plus the advantage of close transportation distance, and inflation is not as intense as in Western countries. Vietnam's shrimp exports to Korea in 2022 reached 468 million USD, up 26% compared to 2021.

According to the Vietnam Association of Seafood Exporters and Producers, shrimp exports to South Korea in the first months of this year 2023 followed a general downward trend in the context of the global economic downturn, rising inflation, and decreasing purchasing power. In the first two months of 2023, Vietnam's shrimp exports to South Korea reached just over US$46 million, down 25% over the same period in 2022.

Along with difficulties in output for products due to supply and demand factors, Vietnamese shrimp is currently facing stiff competition with shrimp from India and Ecuador because the strengths of these two countries are frozen shrimp products, _Small size, and cheap price.

Notably, according to the Vietnam Association of Seafood Exporters and Producers, VKFTA is a bilateral FTA between Vietnam and Korea, implemented in 2015 until now, seemingly facilitating trade and import tariffs. for Vietnamese shrimp products. However, according to detailed information from businesses, Vietnamese shrimp products imported into Korea are being "encumbered" by quota regulations.

That is the situation in which the Korean Government requested an auction to buy quotas for shrimp imports from Vietnam into the country at the price of 14-16% of the import value. If outside the quota, the import tax rate is 20%.

This increases prices and makes it difficult to compete in the market. As a result, importers are no longer motivated to increase purchases of Vietnamese shrimp in order to enjoy preferential tax rates under the Agreement, and they are considering buying shrimp from other countries such as Peru, which is entitled to import tax rates. 0% import and no quota imposed...

Therefore, the Vietnam Association of Seafood Exporters and Producers proposes to the Government and the Ministries of Industry and Trade, the Ministry of Foreign Affairs, the Ministry of Agriculture and Rural Development to review and propose to the Korean side to consider the abolition of the law. quota for shrimp imports from Vietnam or solutions related to the adjustment of the tax rate to 0% for Vietnamese shrimp in VKFTA (same as Peru).

To consolidate and improve Vietnam's shrimp market share in this market, the Vietnam Trade Office in Korea also recommended ministries, branches and localities to implement trade promotion activities for shrimp products. in the Korean market such as: attending a number of prestigious seafood fairs such as the International Seafood Fair Seoul, Busan; Food Fair Seoul Food…; organizing a series of promotional activities, marketing, tasting products processed from shrimp...

At the same time, supporting shrimp export enterprises to research and develop new products, support logistics costs, and costs of participating in trade promotion activities in this market.

The Vietnam Trade Office in Korea also suggested the Korean side take measures to optimize the shrimp quota bidding mechanism in the direction of reducing costs for shrimp importers, studying the possibility of negotiating to upgrade Viet Nam – Korea Free Trade Agreement.

On the part of the Vietnam Association of Seafood Exporters and Producers, it is necessary to closely coordinate with the ministries, branches, localities, and the Vietnamese Embassy in Korea to provide and disseminate accurate and timely information to the community. Vietnamese company. Supporting enterprises to improve their competitiveness at home and abroad.

For exporters, it is necessary to immediately implement policies that care about regular importers. At the same time, in collaboration with import partners, the Vietnam Trade Office in Korea researches consumer market trends, develops new products as well as deploys regular marketing campaigns… Invest in improving technology, production lines to process shrimp products for export.

Source: congthuong.vn