Market Trends of Vietnam Aquafeed Industry
Increase in Export Demand for Aquaculture Products
The growing demand for aquaculture products directly affects the production of high-yield aquafeed. Intensive aquaculture depends on commercially manufactured aquafeed, though most inland farmers in the country rely on farm-made feed. As a member of ASEAN, Vietnam is involved in several bilateral and free trade agreements, which created a massive demand for Vietnamese aquaculture products in significant economies, such as the United States, North America, China, and India.
Additionally, in 2020, the European Union and Vietnam signed a free trade agreement that allowed more seafood products to flow into the EU. According to the Vietnam Association of Seafood Exporters and Producers (VASEP), Vietnam's tuna exports to the EU continued to grow well in September 2022, reaching nearly USD 31 million, up 33% over the same period in 2021.
More than 50 enterprises are currently exporting tuna to the EU. Bidifisco, Tuna Vietnam, and FoodTech are the three largest tuna exporters to this market, accounting for approximately 45% of the country's total tuna export turnover to the EU.
Since there is export-oriented cultivation happening in the country, there is more likelihood of market expansion. It is because more and more people will invest in feed. Hence the quality of the meal that will be used will be better, which is expected to boost the aquafeed demand considerably in the country during the forecast period.
White Leg Shrimp is the Fastest growing
According to the Department for Agriculture and Rural Development, Vietnamese farmers continue to move away from raising black tiger shrimp (Penaeus monodon) and toward the cheaper white leg or Pacific white shrimp (Litopenaeus vannamei). White shrimp is less expensive to raise and grows faster. Increasing profits to combat the global economic slump is the main reason for the switch. The potential to make more money from the white shrimp prompted farmers to move from Vietnam's central region to non-program farming areas such as the Cuu Long River Delta.
Vietnamese farmers in the non-GAP system had individual farms with experience ranging from eight to twelve years of shrimp farming. As the development of the shrimp industry in the province is new, they operated intensive models of Litopenaeus vannamei farming for around five years.
Vietnamese farmers primarily use manufactured compound aquafeeds and do not utilize supplemental feeds such as trash fish and small shrimp. According to the FAO, in Vietnam, feed conversion ratios for white leg shrimps vary between 1.1:1 and 1.2:1. Higher feed conversion ratios encourage farmers to invest heavily in feed. It results in higher stocking densities of shrimps.
According to Vietnam's Department of Fisheries (DoF), shrimp production in the country increased from 2019 to 2020. The authority reports a 10% increase in Litopenaeus vannamei production to 632,000 metric tons. The species is one of the highly consumed and exported shrimps with economic significance in Vietnam. Mekong Delta is Vietnam's central aquaculture production region, which is responsible for producing most of the shrimp.
Thus, numerous semi-intensive and intensive giant tiger prawn farmers are focusing on switching to white-leg shrimp culture. It is resulting in an expanded market for white-leg shrimp feed. These factors are expected to drive the country's demand for white-leg shrimp feed.
