Bright signal for shrimp export to Japan

According to information from Japanese importers, on January 21, 2014, the Japanese Ministry of Health, Labor and Welfare officially announced the increase of Ethoxyquin (ETQ) residue level for shrimp imported from Vietnam to 0.2 ppm. This is a positive signal because ETQ is still the main barrier to Vietnamese shrimp exports.

Since 2012, Vietnam's shrimp exports to Japan have been struggling due to regulations on testing Ethoxyquin, an antioxidant used in shrimp feed. Over the past year, both state management agencies and the Vietnamese business community have made efforts to control ETQ residues in exported shrimp. The reward for that effort is that Japan has officially raised the ETQ residue level by 20 times compared to the current level, from 0.01ppm to 0.2ppm and decided to remove the regulation on testing 100% of shrimp batches imported from Vietnam to ETQ.

In fact, in parallel with the negotiations with Japan, Vietnam has also sent a series of documents to relevant agencies of this country requesting to raise the ETQ residue level for shrimp to 1ppm, equivalent to the residue level applied to fish products. Most recently, Nafiqad sent a dispatch to the Food Safety Department, Ministry of Health, Labor and Welfare of Japan (MHLW) requesting to consider raising the ETQ residue level from the current 0.01ppm to 1ppm.

On the business side, shrimp processing plants exporting to Japan have increased ETQ residue testing in shrimp, from raw materials to processing and exporting. A business representative said that shrimp must undergo ETQ testing five times before being exported to Japan. Despite the increased costs, many businesses have identified Japan as an important market that cannot be lost.

According to statistics from the food import warning system in Japan, the number of Vietnamese shrimp batches contaminated with ETQ decreased sharply from 17 batches in 2012 to 4 batches (as of November 25, 2013).

The impact of the strict ETQ residue inspection regulations in Vietnamese shrimp has caused shrimp exports to this market, which were on the rise, to "fall". In the first 6 months of 2012, shrimp exports to Japan still grew by over 28% compared to the same period in 2011. On May 18, 2012, Japan applied ETQ inspection for 30% of shrimp batches imported from Vietnam with a residue level of 0.01ppm. Shrimp products to this market began to decrease since July and by the end of August 2012, Japan officially applied ETQ inspection for 100% of Vietnamese shrimp, causing shrimp exports to this market to always decrease by double digits in the last 6 months of the year.

Shrimp exports to Japan began to improve since January 2013. In the first 10 months of 2013, shrimp exports to this market reached over 574.5 million USD, up 13% over the same period in 2012. The ETQ issue has improved significantly along with a sharp decrease in shrimp supply from Thailand and high shrimp prices on the world market, which have been supporting Vietnam's shrimp exports to this leading consumer market.

In terms of volume, frozen raw shrimp accounts for 69% of total shrimp imports into Japan. According to statistics from Japan Customs, in the first 9 months of 2013, Vietnam surpassed Thailand to become the world leader in supplying frozen raw shrimp to Japan with 24,806 tons of shrimp, an increase of 8.1%. In addition, the average price of frozen raw shrimp imported into Japan also increased sharply this year due to the scarce supply, which has helped increase the value of Vietnamese shrimp to this market. In the first 9 months of 2013, the import value of frozen shrimp from Vietnam into Japan increased by 37% compared to the same period in 2012.

According to baocongthuong