China overtakes the US as Vietnamese seafood's largest market—how should Japan's sourcing, now third, move?

The map of Vietnamese seafood exports was redrawn in the first half. China overtook the US, long the largest buyer, and exports to China in January–June 2026 reportedly reached about US$1.4 billion. Japan, at about US$790 million, sits third after the US. This move, in which China becomes the "first buyer" with proximity and speed of settlement as its weapons, is a signal for Japanese food buyers who source Vietnamese shrimp and pangasius to reconsider how they structure their sourcing. From the position of third, what should Japan prepare?

China overtakes the US, becoming the largest market in the first half

According to the Vietnam Association of Seafood Exporters and Producers (VASEP) and local reporting, Vietnam's total seafood exports in the first half of 2026 were about US$5.7 billion, up 11.4% year on year. What stands out in the breakdown is the shift in destination rankings. Exports to China jumped about 40% year on year to about US$1.4 billion, overtaking a slightly declining US (about US$898 million) to take the top spot. Japan, up about 2% at about US$790 million, is third after the US.

Looking at the figures alone, Japan is also growing modestly. But because China's upswing is so prominent, its relative presence has faded. Who Vietnam's largest customer is also changes the priority of a production area's shipments. Whether Japan settles into a "stable third-place regular" or continues to be chosen for different value—this is where the moves diverge.

Why China buys this much

Local exporters cite three reasons China is chosen: geographic proximity, low logistics costs, and the speed of payment collection. To China, which shares a border, goods can be carried in a short time at low cost by truck or coastal shipping, which is more advantageous the more the item values live fish and freshness. A representative of Nam Viet reportedly said that proximity and the speed of collection make China a "more attractive destination."

Another push factor is the barriers of the US and European markets. A VASEP representative explains that because the US and Europe raised trade hurdles, exporters proactively shifted toward China. Specifically: the cumbersome procedures of the Marine Mammal Protection Act (MMPA) tied to tuna products, the high anti-dumping duties on shrimp, and the inventory build-up from front-loading shipments in anticipation of tariffs. It is a structure in which companies redirected cargo to a "readable market" to the extent that uncertainty toward the US increased.

First-half destinations by the numbers

Figures are first-half preliminary values from VASEP and local reporting. Converted at about 158 yen per US dollar (as of July 2026), exports to China of about US$1.4 billion come to a scale of about 220 billion yen.

By item, shrimp was about US$2.3 billion (up 13.6% year on year), accounting for over 40% of the total, followed by pangasius (catfish) at about US$1.1 billion (up 12.1%). The growth in shrimp overlaps with the strength of Chinese demand. Read together with the move in which exports of live lobster to China approach the US$1 billion scale a year (Live lobster nears US$1 billion: how China changed the way Vietnamese seafood earns), it is not a single-item story but one in which, across seafood as a whole, China is becoming the "first market to buy."

What is happening behind the rankings

It is too early to take this ranking shift only as a "retreat" for Japan. We organize it from three angles.

• The US decline is not Japan's loss: The US's slight decline is largely due to institutional factors—tariffs and regulation—and does not mean the Japanese market's appeal has dropped. Exports to Japan held a modest plus.
• China is a market of "volume and speed": Live fish, freshness priority and large lots are China's strengths, and they do not fully compete with the hygiene standards, specifications and small-volume, many-item needs Japan seeks. The way they buy is different.
• China begins to set production-area prices: When China becomes the largest buyer, local prices for shrimp and lobster move on Chinese demand. Japanese buyers will have to build sourcing plans on the premise of "the price China sets."

What Japan's sourcing, at third place, should prepare

There is no need to match China in presence. What Japan should take is a design to become a "buyer who continues to be chosen" without competing on volume. First, shift the footing from spot dependence to long-term, multi-year arrangements. In a market where China buys first with proximity and speed of collection, the side that locks in volume and timing before prices move is strong.

Second, team up in the realm of processing and value addition. The Vietnamese side is also seeking to break away from a mass-production-only stance, and the move to sell pangasius as a primary processed product (The day Vietnamese pangasius stops mass production: how processed goods open Japan's sourcing strategy) has begun. If you jointly design processing with the local side to match the specifications Japan's food service and retail seek, you can secure a shelf separate from China's "live, large-lot" demand.

Third, make Japan's own quality and safety standards a bargaining chip. For the Vietnamese side, a "track record of exports to Japan" that clears strict standards also leads to trust for the US and European markets. The example of scallops, where Japan, as the largest buyer, backs the formation of a processing hub (Vietnamese scallops become Japan's largest buyer: how a processing hub opens a new sourcing route), is a reference for a model of digging into a production area through depth of relationship rather than volume.

Ripple effect on the whole market

Now that China has become the largest market, Vietnamese seafood also carries the risk of "concentration on one large customer." If China's import policy or quarantine stance changes, large volumes of cargo could lose their outlet. At that time, the presence of Japan, South Korea and ASEAN, which have kept buying steadily, becomes insurance for the production areas. For Japan, patiently accumulating trading relationships in normal times is a foundation for being prioritized in the production areas' supply-fluctuation phases.

VASEP reportedly cites, as future concerns, the possibility of tighter forced-labor regulations and the introduction of import quotas. The more uncertainty toward the US continues, the more Vietnam advances diversification of destinations. Whether Japan can firm up its position as the "readable third market" after the US and China will govern medium-term sourcing stability.

Key points to check

Summary

The fact that China became the largest market is not a signal for Japanese buyers to "chase on the field of price and speed." Rather, it is an occasion to switch to sourcing that does not compete on volume. First, track monthly how local prices of key items are moving on Chinese demand, and start by considering reorganizing spot-centered purchasing into long-term, multi-year arrangements. Through relationship-building centered on processing collaboration and quality standards, go take the position of a buyer the production area "cannot drop even at third place." Toward sourcing chosen for substance rather than volume, now is the time to turn the rudder.

References: Vietnam News／VnExpress International／The Star