Why will pangasius be the first commodity to recover in terms of export?

22 June, 2023

Pangasius (tra fish) exports are forecasted to recover in the late second quarter of 2023, as inventory in the United States is declining rapidly. In addition, its competitive pricing is an advantage for this commodity in the current challenging economic situation.

The Vietnam Association of Seafood Exporters and Producers (VASEP) has stated that pangasius exports in the first five months of this year reached only 841 million USD, a decrease of 30%. Specifically, exports to the two largest markets, China and the United States, have experienced significant declines of 38% and 62% respectively compared to the same period last year.

Thanks to its competitive advantage of being affordable, pangasius exports will soon recover amidst the challenging global economic conditions.

The reason is the high inventory and low consumption, which has led importers to restrict their imports or only purchase at low prices, resulting in a significant decline in the export value of pangasius to the US. It is expected that Vietnam’s pangasius exports to the US may recover from the end of the second quarter of 2023 as inventory levels decrease.

In the case of the Chinese market, although it has reopened after Covid-19 and trade has become easier, the market demand has not recovered as anticipated. China mainly increases imports of low-priced seafood and raw shrimp from Ecuador and India to serve its processing and export industry. Domestic consumption has not shown strong signs of recovery because, after a long period of Covid-19 restrictions, many people have experienced income reductions or loss, resulting in limited spending, even in the low-price segment.

However, some markets such as Japan, South Korea, and Australia still maintain a more stable demand for value-added processed seafood products from Vietnam. Additionally, Vietnamese pangasius products continue to be exported successfully to markets such as Singapore, with a 19% increase, and Germany, with a 66% increase.

According to VASEP, given the current economic and political fluctuations, it is difficult to provide definite forecasts for the period of 2023-2024. However, as an essential commodity, seafood still maintains certain demand in various markets. The post-Covid and high inflation context has brought about changes in the demand trends for seafood products. High-end seafood products have experienced and will continue to face short-term decreases in demand. On the other hand, affordable products such as dried fish, canned fish, fish sauce, and pangasius may still have better opportunities in many markets.