The EU is one of the largest pangasius consuming markets in the world. This is also the market where Vietnamese pangasius is dominating and there seems to be no competitors. However, since the beginning of the year, nearly 25 Vietnamese pangasius exporting enterprises have withdrawn from this market.

Currently, Vietnamese pangasius exports to the EU market have continuously decreased. As of the first half of June 2021, the total export value of pangasius to the EU reached 51 million USD (down 21% compared to the same period last year). This has caused the export value of pangasius to the EU market to grow negatively for two consecutive years.

Speaking to Tien Phong reporter, Mr. Truong Dinh Hoe, General Secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP) said that in the EU, after the Vietnam - EU Free Trade Agreement (EVFTA) took effect, Vietnam's pangasius exports to this market enjoyed a preferential tax rate, down to only 0%; opening up great opportunities for the Vietnamese pangasius industry.

In the EU, Vietnam is dominating the pangasius market and seems to have no competitors. Countries such as Bangladesh and China also export pangasius to this market, but with much lower volumes.

According to Mr. Hoe, entering 2021, the retail market in the EU began to recover after a sharp decline due to the impact of the COVID-19 pandemic. However, the food service industry (restaurants, hotels, etc.) in the EU is still recovering very slowly. Importers are more cautious in placing orders. In particular, since the outbreak of COVID-19, EU consumers have begun to change their consumption habits, paying more attention to safety, which is already a very high demand, price and convenience.

“Customers are demanding higher quality products at lower prices. For example, the EU is strengthening regulations on residue levels in food and water. Previously, some shipments of frozen pangasius fillets with added water from Vietnam were found to have higher chlorate levels and were put on a rapid alert. The requirements on food safety standards are very strict, if the product is found to be non-compliant, it will be reported simultaneously and thoroughly inspected at the port of entry. This control can take from 2 to 3 weeks, causing businesses to incur additional costs if there is such a shipment. EU customers are also increasingly demanding that pangasius be certified for sustainability, if businesses cannot meet it, it will be very difficult,” said Mr. Hoe.

According to VASEP, in the first half of 2021, Vietnam's pangasius exports reached 788 million USD (up 18% over the same period last year). While exports to the US and small-scale markets are growing strongly, exports to the traditional EU market are continuously decreasing.

According to VASEP representatives, due to changes in the EU market, many pangasius exporting enterprises have shifted to other markets. By the end of May, nearly 25 Vietnamese pangasius exporting enterprises had withdrawn from the EU market.

Some pangasius exporting enterprises reported that they are facing many difficulties in the EU market. Meanwhile, many customers have proactively requested to reduce purchase prices, cancel or postpone orders, so input costs for production, farming and processing are increasing sharply.

The price of raw materials has increased 3-4 times, essential items for factory operations have also increased by 5-25%, the price of aquatic feed has also increased by 15-20%, not to mention wages paid to workers, sea freight rates have increased by 5-7 times... Enterprises cannot accept the price reduction proposal and have to switch to looking for other alternative markets.

Mr. Tran Dinh Luan, Director General of the Directorate of Fisheries (Ministry of Agriculture and Rural Development) said that in order to improve the export value of pangasius to the EU market in the coming time, enterprises need to: Invest, improve processing capacity, meet safety standards and strict conditions from the EU; At the same time, enterprises need to proactively and flexibly manage, reduce costs during operations, increase adaptability and competitiveness in the context of market changes due to the impact of the COVID-19 pandemic...