Stronger foreign competition and harsher regulations set by importing countries are making things harder for Vietnamese shrimp exporters, according to the Shrimp Committee of the Vietnam Association of Seafood Producers and Exporters (VASEP).

Chairperson of the Shrimp Committee Ho Quoc Luc has also spoken about concerns of a possible stop in shrimp exports to Japan this year, as the latter recently started testing 30 per cent of shipments from Vietnam for the banned substances trifluralin and enrofloxacin after detecting one shipment containing antibiotic residues.

If Japan detects two other shipments with these residues, it will halt all imports of Vietnamese shrimp. Such a ban would constitute the worst-case scenario, Business Times reports.

“Shrimp export volumes to Japan would sink in the remaining quarters of the year unless local competent agencies worked with Japan to revise permissible level of antibiotic residues on Vietnamese exports,” said Ho Quoc Luc.

Further, Thailand and India are seeing better shrimp harvests than Vietnam, the committee noted.

Thailand anticipates a shrimp harvest of 600,000-700,000 tonnes this year, 20 per cent higher than in 2011. Moreover, the Thai Government intends to invest at least USD 32 million to buy some 10,000 tonnes of Thai shrimp for inventory to support its farmers if shrimp prices drop.

India’s shrimp has been forecast at 100,000 tonnes for 2012, a 30 per cent rise in output over 2011, and the country recently grew its market share in the US to 8 per cent from 5 per cent last year. India is a major competitor to Vietnamese shrimp exporters in the US market, especially of large-sized shrimp, VNS reports.

Another problem for Vietnam’s farmers is the ongoing shrimp material shortage and high input costs.

Regardless, industry insiders assure there are some advantages for domestic shrimp exporters in the US market.

Tran Thien Hai, general director of the Minh Hai Seafood Joint Stock Company, said that anti-dumping tariffs imposed by US authorities on Indian shrimp are higher than those imposed on Vietnamese shrimp: 2.51 per cent against 1 per cent.

In addition, Thai exported shrimp prices are less competitive than those of Vietnam, as input costs are likely to swell by roughly 10-20 per cent for the Thai industry in light of the country's recent decision to increase its minimum salary by 40 per cent.

Vietnam expects to make roughly USD 2.5 billion from shrimp exports this year. According to the General Office of Customs, the country's shrimp is shipped to 70 international markets, of which Japan and the US are the primary buyers.

The Vietnamese fisheries exports made USD 500 million in May, raising the sector’s total export revenue for the first five months of 2012 to USD 2.3 billion, up by 9.8 per cent over the same period in 2011.