In the first four months of 2019, the estimated export turnover of aquatic products reached US$ 2.4 billion, equivalent to the same period in 2018. Particularly, the first quarter reached US$ 1.8 billion, up 1% over the same period; in which, shrimp industry gained US$ 617.6 million, down by 20% year on year.
In order to achieve the US$ 4.2 billion target of export in the current market conditions, there are still many difficulties which are a big challenge for the shrimp industry. Therefore, promoting shrimp exports to potential markets such as Canada is important task for shrimp businesses, especially taking advantages offered by Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Canada is currently the 6th largest shrimp import market of Vietnam and accounts for nearly 5% of total shrimp export value of Vietnam.
Canada - potential market
As of March 15, 2019, Vietnam shrimp exports to Canada reached US$ 23.8 million, up 7.5% over the same period in 2018. In the structure of Vietnamese shrimp products exported to Canada, the proportion of white legs shrimp is increasing.
In the period from 2007-2016, Vietnam shrimp exports to Canada were unstable, ranging from US$ 65.5 to 201.5 million. However, from 2016 to 2018, Vietnam shrimp exports to Canada continued to grow from US$ 122.5 million in 2016 to US$ 161.6 million in 2018.
For years, Canada has always been named among the top 10 shrimp import markets of Vietnam. Although shrimp exports to this market are not strong and continuous, Canada is considered a potential market for Vietnamese shrimp because of its close position to the US and people’s high living standards. Canadian consumers prefer processed shrimp products. Steamed shrimp is the most popular product in the Canadian market.
In recent years, Canada consumed a lot of warm water shrimp of Southeast Asian countries in the context of declining supply of cold water shrimp. Recent reports expect coldwater shrimp production in Canada will drop sharply in 2019 as shrimp biomass surveys at Canadian fishing grounds show poor results. This can be considered a favorable factor for Vietnam shrimp exports to Canada.
Vietnam - the largest shrimp supplier for Canada
According to the World Trade Center (ITC), Canada's shrimp imports in 2018 reached 513.3 US$ million, down 5% compared to 2017. Vietnam was still the largest shrimp supply for this market, accounting for 30.3% market share in Canada, India and China ranked second and third with 26.3% and 16.9% of the market, respectively.
In 2018, among the main shrimp supplies, shrimp imports into Canada from Vietnam, China and Indonesia increased while that from India, Thailand and Ecuador decreased, of which Thailand dropped the most by 38% compared to 2017. Canada's economy in the last 2 years has been growing well, leading to a higher demand for imported goods, including shrimp.
Currently the Canadian Government is in need of diversifying markets, reducing dependence on imports from the United States, and Vietnam is one of the countries that Canadian businesses are interested in promoting import and export activities.
According to the Vietnam Association of Seafood Exporters and Producers (VASEP), earlier this year, the CPTPP was officially in force for Vietnam; in which, Vietnam and Canada are both members. And this is a good opportunity for Vietnamese shrimp enterprises to exploit the Canadian market because Vietnam's competitors in this market such as India, Thailand and Indonesia do not join the agreement.
With these advantages, enterprises need to research the market carefully, focusing on price, design and quality factors to improve the competitiveness of Vietnamese shrimp products on the Canadian market.
According to the Ministry of Industry and Trade, the CPTPP has come into effect from January 14, 2019, which is a new generation of free trade agreements with the highest level of commitments Vietnam has received from existing FTAs, which will open more opportunities for Vietnam in the context of a dynamic global economy with increasing protectionism.
Among the countries participating in CPTPP, Canada is one of the countries with the highest market access commitments with thousands of tariff lines for imported goods down to 0%, with up to 95% tariff lines being cut off, covering 78% of Vietnam's total export turnover to Canada.
Besides, Canada is one of three member countries that Vietnam has not signed bilateral trade agreement yet. The structure of Vietnamese and Canadian products is less competitive but complementary. Therefore, if Vietnamese enterprises can seize opportunities well, CPTPP will expand the export door for many processing and manufacturing industries, which are Vietnam's strengths such as seafood, textiles, leather, wood, etc.