February saw the country’s tuna export value increase by approximately 40% in comparison with the same period from last year. This growth can be attributed to the recovery of exports to major markets such as the EU, ASEAN, Canada, and Egypt.
Despite initial growth, this trend is not projected to be maintained due to shortages occurring in export processing materials and the growing impact on the market caused by the COVID-19 epidemic. Big tuna consumers such as the United States, Italy, and Spain where the epidemic is spreading rapidly, have suspended importing the product from Vietnam since March.
Indeed, the current crisis has caused tuna prices globally to skyrocket, presenting a challenge for firms looking to purchase raw materials. This has forced businesses to seek alternative raw material sources from other countries in a bid to tackle the shortage of input materials.
Simultaneously, enterprises are also facing difficulties transporting goods, with ships being delayed for several days or even canceled all together, resulting in rising costs for businesses and longer transport times.
Moreover, the customs clearance of goods in several countries has been suspended while their lockdown orders have led to severe congestion occurring at ports, affecting the delivery capability of enterprises.
According to VASEP, from now until June, if the spread of the COVID-19 continues to worsen, many tuna enterprises and other seafood companies look poised to encounter difficulties concerning capital and material shortages for production and export activities.
Small and medium enterprises have been advised to draw up better financial plans in a bid to withstand the current situation. They should find themselves in dire need of government support, especially in terms of capital, debt extension, interest rate reductions, raw material reserves, as well as a simplification of administrative procedures.
VASEP recommends that firms consider shifting to produce canned food to meet the current consumption demand whilst enjoying incentives that come from new-generation free trade agreements such as the EU-Vietnam Free Trade Agreement, along with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.