Vietnamese shrimp firm Minh Phu Seafood Corporation saw a weak December performance top off a poor 2019 overall.
Its export value for December reached $40.5 million -- down 43.3% from December 2018. Each of its export markets saw declines of 40%-50% that month, though sales to Europe fell by 58%, to $3.8m.
Export volume dropped by 42% to 3,643 metric tons.
For the full year 2019 export value was down 14.3% year-on-year, to $643.7m. The company missed its target of $850m, hitting sales worth just 76% of that.
It had targeted exports of 77,400t, up y-o-y from 2018's 76,553t. Instead, exports fell to 57,709t.
The US remained Minh Phu's largest market, though sales there dropped 19.6% to $245.9m in 2019. Sales to Japan faired a little better, falling by 13.2% to $132.7m.
Sales to Europe were actually up y-o-y, by 10.4% to $73.6m.
"Weather and disease strongly affected the raw shrimp resources of Minh Phu this year," the company noted. "At the beginning of the first crop of 2019, shrimp raw materials were abundant, but in the second crop, the number of raw shrimp plummeted due to the weather and complicated situation of disease, making shrimp grow slowly and not enough to supply for the factories."
Raw material prices rose through the fall, and in addition, imported raw shrimp volumes decreased sharply, the firm said. This meant processors faced tough competition and increased prices, while sales prices did not rise in kind.
A shift in markets may well continue this year, with Minh Phu chairman Le Van Quang telling Undercurrent News the company's two new factories -- to be built between now and 2022 -- will “focus on head-on, shell-on shrimp for the EU, Australia, and especially Chinese markets”.
Le told Undercurrent that he saw good opportunities in EU markets, with a Europe-Vietnam free trade agreement signed recently and 0% duties to come into force for shrimp next year.
“We do expect to allocate more volumes to Europe,” he confirmed. “We have been monitoring and preparing for the free trade agreement. It's too soon for the agreement to have had an impact on sales yet, but we think they will increase next year," he said, speaking in September 2019.
In the US, Minh Phu now faces temporary punitive antidumping rates of 10%, while US Customs and Border Protection investigates claims it evaded duties on frozen shrimp imported from India, via Vietnam.
Meanwhile, on the raw material side, it has been investing in speeding along its own expansion in shrimp farming. Its latest VND 280 billion ($12.1m) grew Minh Phu's charter capital in its Loc An subsidiary by 67%, to VND 720bn, and was intended to increase production from two or three harvest rounds per year to four-and-a-half.
2020-01-21 10:15:00Z
https://www.undercurrentnews.com/2020/01/21/weak-december-tops-tough-year-for-minh-phus-shrimp-exports/
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