Shifting pangasius market has Vietnam’s industry hopeful for recovery: SeafoodSource

In May 2024, Vietnam recorded its highest monthly pangasius export volumes in two years, mainly thanks to rising demand from China.

But rapidly rising freight rates and low prices are offsetting some of those gains, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).

Vietnam shipped more than 83,000 metric tons (MT) of pangasius to global markets in May, a 46 percent rise year over year and an 8 percent increase over April 2024. It was the biggest monthly total since May 2022 and marked the third consecutive month of pangasius export volume growth in the country.

Vietnamese pangasius exports to China, including Hong Kong, surged 20 percent year over year in May to more than 29,000 MT, the largest total since February 2023. The Chinese market become more reliable in recent months, with growing demand and stable prices for lower-value whitefish species, which VASEP said should continue to boost Vietnam’s pangasius export volumes in the back half of the year.

Pangasius remains cheaper than domestically farmed freshwater fish, such as carp, in many Chinese retail stores. With the weakening of the Chinese economy forcing consumers to tighten their spending, pangasius is becoming increasingly popular and gaining a strong foothold in the market, VASEP said.

However, although export volumes increased significantly, the value of pangasius exports to China only edged up 0.4 percent year over year in May, reaching USD 50.3 million (EUR 46.4 million). In the first five months of 2024, sales to China dropped 13 percent year over year to USD 203 million (EUR 187.5 million), mainly due to a drop in export prices.

This drop in export prices for pangasius played out across several markets.

By the end of May, the average price of Vietnamese pangasius exported to China dropped 1 percent month over month to USD 1.88 (EUR 1.74) per kilogram, rates to Mexico fell by 7.4 percent to USD 2.13 (EUR 1.97) per kilogram, export prices to the E.U. dropped by 5 percent to USD 2.43 (EUR 2.24) per kilogram, prices to the U.K. decreased 7.2 percent to USD 2.43 (EUR 2.24) per kilogram, and prices to Brazil declined by 1.5 percent to USD 2.69 (EUR 2.48) per kilogram.

In contrast, the average price of pangasius exported to the U.S. increased by 1.7 percent month over month to USD 2.95 (EUR 2.72) per kilogram.

Though the U.S. spike represented a bright spot, Siam Canadian Vietnam Sales Manager Le Thuy Trang said she believes May might have represented a peak for the year, citing the falling export prices, high freight rates, and low farmgate prices as reasons why sales may continue to slow as the year rolls on.

VASEP data backs up that claim, showing that from 28 June to 4 July, farmgate prices for pangasius sized 0.7 to 1 kilograms per fish ranged between VND 26,200 (USD 1.02, EUR 0.94) and VND 26,500 (USD 1.03, EUR 0.95) per kilogram, down from VND 27,000 (USD 1.05, EUR 0.97) to VND 27,200 (USD 1.06, EUR 0.98) per kilogram that farmers saw in the last week of May.

VASEP Communication Director Le Hang said she has some concerns regarding raw materials in Vietnam. With the decline in both export and farmgate prices, farmers are facing financial losses, and there’s a risk of widespread abandonment of ponds, potentially resulting in a shortage of raw materials, she said. Nevertheless, Hang said the growth seen in China and positive outcomes in other large markets like the U.S. is making her more optimistic for 2024.

“I am hopeful that in the latter half of the year, major import markets will exhibit stronger indicators, especially as the U.S. market’s recovery positively impacts others,” Hang said in a statement. “Following the second quarter, we anticipate a reduction in inventory issues and transportation challenges, which should spur demand recovery and price increases in the third quarter – a peak period for year-end festivals.”

Trang said she was anticipating an increase in pangasius export prices in coming months, as inventory levels in many major markets are running low.

Vietnam has set the target of earning USD 2 billion (EUR 1.85 billion) from its pangasius exports this year, which would be an 11 percent increase over 2023’s total. From January to May 2024, Vietnam’s pangasius export value stood at USD 747 million (EUR 690 million), up 2 percent year over year, according to VASEP.

Siam Canadian Group Frozen Seafood Exporters 

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