Will Vietnam benefit from China’s embargo on Japanese seafood imports?

The impact of China's ban on Japanese seafood imports, especially on Vietnam’s shrimp industry, will become clearer in a month, says Ho Quoc Luc, chairman of major exporter Sao Ta Food JSC.

The impact cannot be gauged right now, because there’s no solid evidence as yet, he adds.

On August 24, China suspended the import of all aquatic products from Japan, including edible seafood, hours after it started releasing treated radioactive water from the stricken Fukushima nuclear power plant.

A CNBC report on the suspension mentions that seafood exports from Japan to China include red sea bream, scallops, and mackerel. China is also Japan’s largest importer of fish, valued at 71.7 billion yen ($493 million) in 2022 and 53.6 billion yen ($336 million) worth of crustaceans and mollusks, like crabs and scallops.

China’s customs agency said in a statement that the suspension of imports aimed to "comprehensively prevent the risk of radioactive contamination of food, protect the health of Chinese consumers and ensure the safety of imported food".

Luc told The Investor that if the Japanese feel insecure about their domestic products, the demand to import shrimp may increase, and Vietnam will benefit. It will probably take another month to see what the impact will be on Vietnam’s shrimp industry, he said.

If China bans processed goods from Japan, Vietnam will be the best substitute supplier, he added.

Truong Dinh Hoe, general secretary of VASEP, told the newspaper that the main impact would depend on psychological fear of Japanese consumers. He said there was a possibility that they may choose to use imported goods instead of domestic exploitation of seafood in waters of dubious quality.

According to the Vietnam Association of Seafood Exporters and Producers (VASEP), Vietnam's seafood export reached $4.9 billion in the first seven months of the year. Among the major markets were China (China and Hong Kong SAR) with $845 million, ranked second after the U.S.

Vietnam exports seven seafood items to China - shrimp, crab, salmon, squid, pollocks, cod, and pangasius. China imported $328 million worth of Vietnamese shrimp (17% of Vietnam's total shrimp export turnover) in the first seven months of this year, second after the U.S. at $375 million.

China was Vietnam's largest pangasius buyer, accounting for more than 30% of the total at about $337 million in the first seven months of the year.

In the same period, Vietanm exported seafood worth $839 million to Japan.