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Opportunities for pangasius exports with Vietnam FTA - Mercosur

08/07/2024 11:43

Vietnam is in the process of promoting the negotiation of a Free Trade Agreement (FTA) with the South American Common Market, to make this FTA a driving force to exploit the export market in Latin America.

Businesses expect good growth in pangasius exports to Brazil. Source: Ministry of Industry and Trade of Vietnam

According to the Vietnam Association of Seafood Exporters and Processors (VASEP), the South American Common Market (Mercosur) is a sub-regional bloc established in 1991 by countries including Argentina, Brazil, Paraguay and Uruguay. Mercosur is a dynamic, competitive and developing economic and industrial sector, which has a growing influence with the status of the 5th largest economic bloc in the world. With an important geographical location in East Asia and the Asia-Pacific region, Vietnam is an important gateway for Mercosur countries to enter the ASEAN market.

As a member of the Mercosur bloc, Brazil is currently Vietnam's largest trading partner in the bloc and in Southeast Asia.

According to statistics of Vietnam Customs, in the first half of June 2024, Vietnam's pangasius exports to Brazil reached 4 million USD, up 5% over the same period last year. Cumulative pangasius exports as of the first half of June 2024 reached 50 million USD, up 47% over the same period in 2023. January 2024 was recorded as the month with the highest export turnover, with nearly 14 million USD, up 83% over the same period. Only in February 2024, the value of pangasius exports to this market decreased by 6%, reaching nearly 6 million USD.

Since the beginning of this year, Brazil has almost only imported frozen pangasius products and frozen pangasius fillets from Vietnam. The largest pangasius supplier to this market in the first 5 months of this year is Hung Ca 2, accounting for 19% of the value.

In addition, Vietnam's pangasius exports to a number of other markets in the bloc are considered to still have potential. By the end of May 2024, pangasius exports to Argentina reached nearly 1.5 million USD, up 238%; to Uruguay reached more than 700 thousand USD, a slight increase of 2% over the same period.

Meanwhile, Paraguay is still quite limited in importing pangasius from Vietnam. This country is a major exporter of agricultural products, livestock and electrical energy in the world. Currently, Vinh Hoan is the only Vietnamese enterprise exporting to this market in the first 5 months of this year.

Due to geographical distance, language differences, there are no direct freight and passenger transportation routes, leading to high logistics costs for goods from Vietnam to this market and the two sides do not have a free trade agreement.

Businesses expect that with these potentials, Vietnam and the Mercosur market bloc will soon have the first FTA, paving the way for export trade cooperation between the two sides, including pangasius exports to this market.


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