Vietnam processors run low on shrimp, pangasius exports rise

Truong Dinh Hoe, secretary general of the Vietnam Association of Seafood Exporters and Producers (Vasep) said many factories in the Mekong Delta and the central region are processing at 30-50% capacity because of the shrimp shortage. The shortage is due to bad weather, seasonality and increasing demand.

Only a small number of shrimp processors and exporters in the country own their own shrimp farms, preferring to buy from private farmers.

"Shrimp prices are unstable compared to other export products like tra fish (pangasius). Shrimp are very sensitive to weather change, environment and diseases, which is why processors like to pass the buck to farmers," Hoe said.

Since February many shrimp factories have stopped working, as El Nino weather conditions have affected the shrimp season. While they wait for the next shrimp harvest, some factories have switched to processing imported shrimp.

Tran Van Linh, director of Thuan Phuoc Seafoods and Trading Corporation in Danang City said the severe shortage in the Central region had forced him to sign bigger contracts.

"Big contracts mean we can pay farmers more and boost our competitiveness," he said. The shift in focus has helped him maintain 60-70% of capacity at the factory.

In Ca Mau Province, one of the biggest shrimp growing provinces in the country, the shrimp buying price has increased by 15-20%. But dozens of factories have closed down. Ly Phuoc An, director of Phu Cuong Jostoco in Ca Mau Province said he had to choose a cheaper shrimp as his main product because it was more available.

An said that he has found new markets so that he can survive until there is more shrimp.

"Demand from European countries has decreased considerably since the financial crisis and the euro weakened. Markets shifted to Japan, Taiwan and only a few European countries."

According to An, sourcing new markets has allowed him to ship $5.5 million (€4.2 million) of shrimp, only a slight increase from same period last year despite the current shrimp shortage.

Quality boost for pangasius

Vietnamese seafood producers have been securing international quality certificates to attract major markets including the US, the EU, Japan, according to Vasep.

Recently Vinh Hoan Corp, Vietnam’s biggest tra exporter received the Good Agricultural Practice or Global Gap by Bureau Veritas Certification (BVC) for its 40-hectare fish farm in Dong Thap Province. Vinh Hoan is the latest tra exporter to receive the certificate since NTC A Corp with its 20-hectare farm and the giant shrimp exporter Minh Phu Corp were certified.

In an announcement posted on its website, the head of Vinh Hoan said the company expected to raise the average value of its tra by 10-20%, and build its quality export capacity.

After receiving the Global Gap certificate, Vinh Hoan signed a contract to provide 120 tonnes of tra to an EU customer.

In the past Vietnamese tra and shrimp exporters had faced numerous temporary embargoes from Russia and the US because of microorganism contamination or an excess of antibiotics in the product.

As a result, growing numbers of Vietnamese producers and exporters in Mekong Delta have been applying for quality certificates such as EuroGap, GlobalGap, HACCP to meet higher quality requirements.

Vietnam’s government believes tra will continue to be a key export product, and has approved a project to develop production and sales of the fish in Mekong Delta through 2020.

According to the project, the government will invest VND800 billion (€32.3 million/$41.9 million). This year the total output is also expected to increase to 1.5 million tonnes, valued at $1.5 billion (€1.2 billion).

In the first half of the year, Vietnam seafood processors exported more than $1.8 billion (€1.4 billion) worth of seafood, up 18.5% compared to the same period of last year.

The Ministry of Industry and Trade expects total seafood exports in 2010 to reach $4.7 billion (€3.6 billion), up 6.8% from last year.

[Source: VietNamNet/SGT]