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GROUP 4 - IBC201 - IB1802 - Group Assignment
GROUP 4 - IBC201 - IB1802 - Group Assignment
EXPORT SHRIMP
IN VIETNAM
Lecturer: BUI THI THU HUYEN
GROUP 4
Class: IB1802
Semester: Fall 2023
Date: November 5, 2023
Group Assignment FPT University
Table of Content
I. INTRODUCTION ............................................................................................................. 2
II. REVENUE AND MARKET SHARE OF VIETNAM’S SHRIMP ......................................... 3
III. REVENUE FROM EXPORTING VIETNAM’S SHRIMP.................................................... 4
1. Revenue in 2021 ........................................................................................................ 5
1.1. The United States Market ...................................................................................... 5
1.2. Other markets......................................................................................................... 6
2. Revenue in 2022 ........................................................................................................ 7
IV. OPPORTUNITIES AND CHALLENGES FOR VIETNAM’S SHRIMP .............................. 8
1. Opportunities ............................................................................................................. 8
1.1. Natural condition.................................................................................................... 8
1.2. Trade Agreements.................................................................................................. 9
1.3. Technology and Innovation ................................................................................... 9
2. Challenges ............................................................................................................... 10
2.1. The salinity of shrimp farming water .................................................................. 10
2.2. Diseases ............................................................................................................... 11
2.3. Competitive Advantage ....................................................................................... 11
IV. PLANT TO IMPLEMENT THE STRATEGY................................................................... 12
1. Strategies to achieve goals .................................................................................... 12
2. Strategies for achieving price goals ...................................................................... 13
V. STRATEGY WE NEED TO NEGOTIATE WITH PARTNERS..........................................14
1. Updating on the shrimp export market situation .................................................. 14
2. Collecting target market information ..................................................................... 14
2.1. Business Culture.................................................................................................. 14
2.2. Characteristics of World Market Demand........................................................... 14
2.3. Taxes, costs, and quality standards ................................................................... 15
2.4. Law and Politics ................................................................................................... 15
VI. CONCLUSION .............................................................................................................. 17
V. REFERENCES .............................................................................................................. 18
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Group Assignment FPT University
I. INTRODUCTION
Many experts assess that Vietnam's shrimp industry will face many difficulties in 2023
because our country will have to compete more strongly with shrimp from Ecuador and India.
In addition, the price of imported shrimp on the world market has gradually decreased since
the second half of 2022 and is expected to continue to decrease as global supply increases to
about 6 million tons. Our country's shrimp export industry accounts for 13-14% of the world's
total shrimp export value. Every year, the shrimp industry contributes about 40-45% of the total
seafood export value, equivalent to 3.5-4 billion US dollars. Therefore, the shrimp export
industry is an important bridge for Vietnam to promote economic development.
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Group Assignment FPT University
Vietnam is one of the top 3 largest shrimp exporting countries in the world, along with
Ecuador and India. Vietnam's shrimp farming industry generates billions of export dollars,
making up about 10.1% market share of the global shrimp exporting industry value. Shrimp
exports are also undeniably the most vital part of Vietnam's seafood industry, contributing
39.1% of the seafood export value. The US, Japan, and the EU are key markets for
Vietnamese shrimp exporters. Vietnamese shrimp has been exported to about 100 countries
and territories, with 5 major markets including Europe, America, Japan, China, and Korea.
Vietnam has become the world's second-largest shrimp supplier with export value accounting
for 13-14% of the world's total shrimp export value.
In 2021, despite being significantly affected by COVID-19, the supply chain and
production chain of the shrimp industry were delayed locally, then impacted the global supply
chain, causing a sudden increase in transportation costs. These challenges cause
considerable damage to each shrimp farming household, each farm, and each shrimp
processing facility. All that is in the past, although the concern may still be there, especially in
small shrimp farming households.
In 2022, harvested farmed shrimp output will reach 1080 thousand tons, an increase
of 8.5% compared to 2021. Of which, black tiger shrimp output will reach 271.4 thousand tons;
whiteleg shrimp reached 743.5 thousand tons; the remaining are freshwater prawns and other
types of shrimp. Of the total shrimp harvest, about 451.7 thousand tons are processed for
export, and the rest is consumed domestically. The average shrimp price in the world is 9.52
USD/kg, from which we can calculate the average annual domestic shrimp market share
revenue will be 5.9 billion USD and the average annual export shrimp market share revenue
will be 4.3 billion USD.
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Group Assignment FPT University
Realizing the promising growth potential for seafood consumption, the Vietnamese
government aims to maintain a leading position in its development planning strategy until 2030.
The government has issued Resolution 50/2018/QD-TTg regulating main aquaculture species,
including black tiger shrimp and whiteleg shrimp, since 2019. Resolution 79/QD-TTg was also
issued to Exploit action plans to develop the shrimp industry until 2025.
Accordingly, the government sets the following goals for the period 2021-2025:
• Total export turnover of white leg shrimp and black tiger shrimp reached 8.4
billion USD (average growth of 12.7% in the period 2021-2025)
• The farming area reached 750,000 hectares
• Farmed shrimp output reached 1.1 million tons (average growth of 6.73% in the
period 2021-2025).
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Group Assignment FPT University
1. Revenue in 2021
Data from the General Department of Customs shows that shrimp export turnover in
2021 reached 3.88 billion USD, an increase of 4% compared to the turnover of 3.73 billion
USD in 2020.
The situation of the US market has created a new record in both shrimp production and
import turnover, with 7 billion USD and an output of over 750,000 tons. Vietnam ranked fourth
in the race to export shrimp to the US. Vietnam's shrimp exports to the US in 2021 reached
88,161 tons, worth 1.089 billion USD, an increase of 33% in volume and 39% in value
compared to 2020. The US market accounts for 28% of total Vietnam's shrimp export value in
2021.
Vietnamese shrimp is exported to 17 US states, of which New York state recorded the
largest volume with 31,647 tons, accounting for 36% of the total volume of shrimp imports from
Vietnam to the US; California imported the second most with 23,995 tons, accounting for 27%
of the total volume of shrimp imported from Vietnam.
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Group Assignment FPT University
Besides the US, the EU and UK markets are also large and potential markets for
Vietnamese shrimp. In 2021, Vietnam's shrimp exports to this market will reach 855 million
USD. Shrimp exports to Japan reached 583 million USD, to China and Korea both reached
389 million USD and to other markets reached 583 million USD.
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Group Assignment FPT University
2. Revenue in 2022
Data from the General Department of Customs shows that shrimp export turnover in
2022 reached a record of 4.3 billion USD, an increase of 14% compared to the turnover of 3.88
billion USD in 2021.
In 2022, shrimp exports to the US decreased compared to 2021 due to record inflation
in the US, high inventory while purchasing power decreased, and the price of shrimp exported
to the US decreased. The number of export profits to the US reached 903 million USD, down
17% compared to 2021.
Besides the US, in 2022, Vietnam's shrimp exports to the EU reached 688 million USD.
Shrimp exports to China reached 645 million USD, to Japan reached 602 million USD, to Korea
reached 473 million USD, and to other markets reached 989 million USD. This shows that
Vietnam has found many new markets to export shrimp in 2022.
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Group Assignment FPT University
Vietnam is one of the world's leading shrimp exporters, with a market share of about
14% in 2020. Vietnam has a favorable natural environment, a large and highly skilled
workforce, and a strong commitment Strong in quality and sustainability. However, the shrimp
export industry also faces many challenges, such as increased competition, price fluctuations,
trade barriers, and environmental issues. Let's explore the current opportunities that the
Vietnamese shrimp export industry can seize to overcome these challenges and improve
competitiveness and profits.
1. Opportunities
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Group Assignment FPT University
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Group Assignment FPT University
optimize shrimp breeding, feeding, harvesting, and processing. These technologies can help
reduce costs, increase productivity, enhance traceability, and ensure food safety. Not only that,
Vietnam also promotes innovation by supporting research and development (R&D),
encouraging cooperation between stakeholders, and facilitating access to finance and markets
for creative solutions.
2. Challenges
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Group Assignment FPT University
2.2. Diseases
Vietnam is facing extremely huge risks due to the loss of competitive advantage in
production costs compared to main competitors such as Ecuador and India. Today, world
shrimp prices predict that imported shrimp prices on the world market will continue to decrease
due to increased global supply. Meanwhile, domestic raw shrimp prices tend to increase. The
difference between imported shrimp prices and domestic raw material prices creates difficulties
in mobilizing raw materials for shrimp processing and export. Inflation and the Russia-Ukraine
conflict also contribute to increasing difficulties for the shrimp farming industry, as they can
cause market fluctuations and create business risks. Vietnam is also affected by international
payment risks and supply chain disruptions in import and export because major shipping lines
have announced they will not ship to and from Russia, leading to increased shipping costs;
rising import input costs for basic goods, and weakening demand in Russia, Ukraine and
related countries.
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Group Assignment FPT University
Building a strategic plan from comprehensive to specific, we clearly define the goal of
developing Vietnamese shrimp products in the domestic market and especially exporting
abroad.
Moreover, it is about building a brand and positioning, maintaining a position in the top
3 shrimp exporting countries in the world, developing a strong brand identity, and emphasizing
quality and sustainability. Besides, increasing profit margins, striving for a balance between
competitive prices and maximizing profit margins.
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Group Assignment FPT University
In addition, for new markets, it is necessary to initially offer a lower price to gain market
share in the first 1 year to 2 years and then have a plan to gradually increase the price, this is
penetration pricing. This strategy will be a solid foundation to improve shrimp quality to reduce
the cost of farmed shrimp and increase the competitiveness of Vietnamese shrimp in the
international market. From there, the shrimp industry will have a more stable and sustainable
development foundation.
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Group Assignment FPT University
To make progress in promoting the economy of the seafood industry, especially the
shrimp industry of Vietnam, shrimp production enterprises need to have good strategies to
reach good agreements in negotiations with foreign partners.
If you want to negotiate trade with an American partner, you must at least grasp their
wishes: Americans are very practical, they appreciate the qualifications of professional
partners and are willing to listen to their comments. The American attitude in negotiations is
considered very high and standard. When Americans want to meet partners, they already have
an implementation program in hand, not a project draft.
According to a report by the Food and Agriculture Organization of the United Nations
(FAO), global market demand for shrimp products has continued to increase in recent years.
In particular, shrimp is one of the food sources that meets high standards of nutritional value,
and is also a popular and popular dish in the world. The capacity of the global shrimp farming
industry has increased significantly over the years, reaching more than 4.2 million tons in 2021,
and is expected to continue to increase in the future. Meeting the growing demand for shrimp
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Group Assignment FPT University
products requires the development and expansion of global shrimp farming businesses and
companies, as well as improving product quality and shrimp farming productivity.
The US also has a high demand for fresh/frozen shrimp meat products (PD) from
Vietnam. It is expected that in the coming time, Vietnamese shrimp exports to the US will
continue to increase. The decrease in cold-water shrimp exploitation at supplies to the US also
causes the US's demand for warm-water shrimp imports to increase. Hurricane Ida, which
occurred in early September this year, also affected the US domestic shrimp supply.
Current US law considers "transaction value" as the basis for determining the value of
imported goods. In general, the transaction value is the actual price paid or payable for the
imported goods, with certain additional costs not included in the price. Many US taxes are
levied at a rate on the value of goods, that is, the tax rate is determined based on the
percentage of the value of imported goods, the tax rate fluctuates from 1%-40%, in which the
tax rate is Normally from 2%-7% of the value of imported goods.
Some imports, usually agricultural products and other processed goods, are subject to
a "quantity tax" - a tax imposed on a certain quantity. Some products are subject to lump sum
taxes, which combine ad valorem and quantity taxes.
The import scale of the US market, each year is about 1,800 billion USD with a full
range of goods of different grades, is a market with high purchasing power, opening up many
business cooperation opportunities for foreign countries. partner. However, this is also a
fiercely competitive, sensitive, and very demanding market, consumers are protected by an
extremely strict legal system. With 50 states and 50 laws, sometimes each state's Law exceeds
the provisions of Federal Law. Therefore, to penetrate and affirm their position in this market,
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Group Assignment FPT University
more than in any other market, Vietnamese businesses need to pay special attention to
carefully understanding partners, laws, and business practices of the market. this school.
When bringing aquatic products into the US market, we must pay attention and
understand the US legal system. The US legal system is quite complex, strict, and new to
Vietnamese export businesses. Therefore, if businesses do not research and understand
clearly, they will suffer heavy losses in business. Some of the following laws can be cited:
• The antitrust law provides quite severe criminal sanctions for monopolistic
practices or unfair competition in business, specifically a fine of up to 1 million
USD for companies, 100,000 USD, or 3 years in prison. year for individuals.
• Product liability law, under which damaged consumers can sue the
manufacturer for damages that are many times the actual damage.
• US federal and state laws are applied at the same time in the field of business
tax, requiring in addition to mastering state laws, businesses with business
relationships must also master Federal laws.
Therefore, it can be said that there is not a high compatibility between the export of
Vietnamese seafood products in general and the shrimp industry in particular with the import
requirements of the US market.
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Group Assignment FPT University
VII. CONCLUSION
In conclusion, to develop Vietnamese shrimp products for the world market, the
industry needs to combine the efforts of relevant parties, from businesses to governments and
international organizations. Only through cooperation and commitment to quality and
sustainability can Vietnamese shrimp products achieve success in the international market.
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Group Assignment FPT University
VIII. REFERENCES
https://www.statista.com/statistics/1329779/vietnam-shrimp-export-volume/
https://seafood.vasep.com.vn/key-seafood-sectors/shrimp/news/vietnam-s-shrimp-exports-
are-expected-to-reach-a-growth-of-10-12-in-2022-24036.html
https://www.vietdata.vn/post/vietnam-is-the-second-largest-shrimp-exporter-in-the-
world?fbclid=IwAR3hCq3oBQER2jRpCY0dlaEMckbaJ30bmOOp81_AYDMEfvMS2Qs-
KtGGnj0#:~:text=Vietnam%20has%20become%20the%20world's,to%203.5%2D4%20billio
n%20USD
https://kisvn.vn/en/wp-content/uploads/sites/2/2023/04/Shrimp-market-in-
dept_eng.pdf?fbclid=IwAR3f0NgWyorDr6QMz70dVAdk2ueA7Zpb45VskGLFxDtYmU9st2
qYrHdZM2c
https://www.globalseafood.org/advocate/current-production-challenges-and-the-future-of-
shrimp-farming/
https://vioit.org.vn/vn/quy-hoach/nganh/co-hoi-va-thach-thuc-cua-nganh-che-bien-tom-xuat-
khau-viet-nam-5187.4101.html
https://plo.vn/canh-bao-xuat-khau-tom-bi-anh-huong-boi-xung-dot-nga-ukraine-
post670758.html
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