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Seafood Industry – Outlook for the Second Half of 2024

• In 1H2024, the seafood industry is recovering with a slight increase of 6.8% YoY due to improved demand. The growth in the shrimp and pangasius sectors is primarily due to increased production, while selling prices remain lower than the same period last year due to intense competition and weak market demand. In the 2H2024, we expect the seafood industry to continue the growth trend from 1H2024, with recovery in the US and Japan markets being more prominent than in other markets.
• The pangasius sector increased slightly by 5% YoY in 1H2024 due to a 17% YoY increase in production. The outlook for 2H2024 focuses on increased production levels due to more competitive pangasius prices compared to other fish species. Pangasius prices are expected to gradually increase in the second half of 2024 across all markets due to the peak season; however, the increase will not be strong due to the weak economic conditions in various countries and expectations of improvement in 2025 after the Fed is projected to cut interest rates in September.
• The shrimp sector also saw a slight increase of 6% YoY in 1H2024, but the export value of white shrimp only increased by 3% YoY to $1.1 billion, while tiger shrimp reached $199 million (-10% YoY). The growth outlook for 2H2024 also focuses on increased production levels due to high competition with Ecuador and India. Shrimp prices are expected to gradually rise in various markets, with the Japanese market expected to improve sooner due to (1) a stronger Yen/USD exchange rate as the Fed cuts interest rates and (2) lower price competition.
• Gross margins are expected to increase in 2H2024 for companies with a high degree of self-sufficiency in shrimp/raw fish materials such as VHC, ANV, and FMC, due to low input agricultural costs while selling prices are expected to gradually increase in most markets. Additionally, the expected stability of raw fish/shrimp prices in 2H2024 will also support the gross margins of companies with lower self-sufficiency.
• International shipping costs to major markets are expected to decrease in 2H2024 due to the arrival of new ships from Vietnamese shipping companies, which will help improve net margins for seafood exporters selling at CFR prices or improve selling prices for exporters selling at FOB prices (due to reduced cost sharing with buyers) in 2H2024.