Red Sea tensions are the new challenge for the seafood industry in 2024

Commodity exports in early 2024 face new challenges Red Sea tensions keep export coffee prices anchored at peak

According to the Vietnam Association of Seafood Exporters and Producers, in 2023, seafood exports seem to return to their normal trajectory of gradually increasing from the second quarter, peaking in the third quarter when orders increase to serve year-end demand, and the fourth quarter is usually lower than the third quarter.

Tăng cước vận chuyển đường biển, doanh nghiệp xuất khẩu đối diện khó khăn kép

Increasing sea freight rates, export enterprises face double difficulties (Illustration photo)

That shows that the market signal and business situation of the seafood business community are gradually returning to normal.

Last year’s low price trend is expected to end this year. Seafood prices will rebound from the second quarter and could increase further in the second half of 2024.

However, businesses are most concerned about the conflict in the Middle East, which threatens to disrupt global trade, including seafood. The instability in the Red Sea is having a serious impact on the global supply chain. Shipping lines are rerouting, making the journey between Asia, Europe and the East Coast of North America longer. Freight rates are rising sharply and cargo insurance is increasing.

Recently, there was news that the shipping route through the Panama Canal was also affected due to low water levels, causing a reduction in container traffic through here.

Thus, the new and big challenge for the global seafood trade this year is that shipping through both the Suez and Panama Canals is facing difficulties. The consequences could be backlogs of goods, shortages of container ships and empty containers. This will affect the supply chain and threaten to make global inflation worse.

Over the past time, the efforts and flexibility of businesses have helped the seafood industry overcome the Covid period with similar logistical challenges that disrupted the supply chain.

There may be some “turns” in export markets and export products, turning challenges into opportunities. For example, China may attract more businesses this year, because of its geographical proximity, low transportation costs, and easier control.

More importantly, China will certainly see a reduction in supply from Ecuador due to both the unstable security situation in this South American country and the difficulty of shipping and increased costs. Therefore, China will have to compensate for the supply from Vietnam and other Asian countries.

Or another example of export product trends. With the characteristics of easy preservation, long shelf life, reasonable price, canned seafood, packaged seafood and dried goods will have more demand this year in the context of war, conflict and inflation.

In 2024, there will still be difficulties and challenges from the previous year and a new challenge is the conflict in the Middle East, but with the efforts, acumen and adaptability of seafood businesses, along with signs of market recovery, seafood exports are forecast to reach 9.5 billion USD, an increase of 6% compared to 2023.

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