Vietnam to expand fisheries sector

A key element of the investment programme aims at doubling the value of river catfish (tra catfish) exports to $3 billion a year which will provide a major boost to the fast growing aquaculture sector that already ships a major portion of its output to overseas markets.

Plans to expand aquaculture production include upgrading the quality of processed fishery products and ensuring that fish farming practices comply with international health and environmental protection requirements. The programme is part of wider government efforts to modernise the management and monitoring of the aquaculture and marine fisheries sector that has grown rapidly during the past decade to place Vietnam among the world’s top five fishery producers.

Although Vietnam has developed into a major seafood exporter, the fisheries processing industry relies on imported stocks for an important share of its fish supplies. Government plans to boost aquaculture and offshore capture fisheries are aimed at increasing employment opportunities and expanding domestic fish supplies to the growing number of export processing plants.

Shrimp the main product

Shrimp is the main product of the fish processing industry in terms of value while processed fish are largest in terms of volume.

According to government figures, shrimp account for over half of the value of processed fishery products while processed fish including tra catfish represent almost one quarter. The other important category is cuttlefish which when dried is a popular delicacy in many Asian countries.

Processed fish is the main product category in tonnage terms accounting for about 40% of the more than 500,000mt of processed seafood produced each year. Shrimp account for about 25% of the processed tonnage with cuttlefish being the other major category.
Vietnam’s rapid growth as a fisheries exporter has been assisted by the availability of low cost labour for fish processing plants, rising domestic fisheries production and imports to supplement local supplies. Mirroring the growth of Vietnam’s other labour intensive export industries including textiles, garments and footwear, Vietnamese fish processing plants need to keep costs low to compete with processing plants in China and elsewhere in Asia.

In a bid to improve the industry’s competitiveness, Vietnam’s Association of Seafood Processors and Exporters (VASEP) recently has requested the government to reduce or zero rate import duties on all fishery products imported for export processing.

According to VASEP deputy chairman, Nguyen Huu Dung, the number of seafood processing plants in Vietnam has now grown to about 700. However, Vietnam’s fishing fleet and the aquaculture industry can supply only half of processing plant’s fisheries requirements leaving processors reliant on imports for 50% of their requirements.

While accepting the imposition of import duties to protect the country’s black tiger shrimp and tra catfish producers, VASEP has proposed the government lower or zero rate duties on imports of marine capture fish and farmed salmon which do not compete with Vietnamese fisheries producers.

Government plans to invest VND 1,300 billion expanding aquaculture production in southern Vietnam include adjusting the present zoning system, developing breeding infrastructure and setting up modern information systems to forecast price and consumption. Around VND 800 million of the total targeted investment will be made from 2010 to 2015 and the remaining VND 540 million during 2016 to 2020.

As the programme gets underway, catfish output in the southern Mekong Delta region, the country’s largest catfish production area, is targeted to reach 1.5 million mt in 2010. Exports of processed tra catfish are expected to reach 600,000mt this year, worth an estimated $1.5 billion.

The government’s aquaculture development plan calls for tra catfish exports to grow by around $700 million, equivalent to 50% in value, to reach $2.2 billion in 2015. Tra catfish exports are then projected to grow by a further $800 million over the following five years, reaching $3 billion in 2020.

Small production units prevented

To encourage the development of large catfish farms and the use of modern aquaculture technology, regulations are being introduced preventing the growth of small scale production units. New tra catfish breeding units will be required to occupy a minimum area of at least 10 hectares and must be located in designated fish breeding zones to avoid small, scattered breeding units being developed.

Breeding areas will be set up along the Tien and Hau rivers in Can Tho city, also Vinh Long, An Giang, Tien Giang and Dong Thap provinces. The total maximum breeding area will be limited to 11,000 hectares in 2015, rising to 13,000 hectares in 2020.

In a separate move to encourage development of larger, more efficient breeding units, the government plans to reorganise existing small scale family-run tra catfish breed units under community management model schemes and to develop new breeding cooperatives.

Plans to expand tra catfish production form part of the government’s long term fisheries development programme aimed at increasing aquaculture and marine capture fisheries output. The programme includes increasing efforts to ensure that production standards meet import requirements of key markets in Europe, the United States and Japan.

Vietnam already has suffered costly prawn import bans in some markets including the European Union after antibiotic residues were detected in some export shipments. The government is concerned that failure to comply with international production standards could also effect exports of other fishery products.

The Ministry of Agriculture and Rural Development is working to ensure that fishery exporters comply with the EU’s Illegal, Unreported and Unregulated (IUU) fishing regulations and the United States Farm Bill. Observation and monitoring systems are being established to provide necessary data showing that the Vietnamese fisheries sector complies with these regulations.

Following his return from meeting United States Agriculture Secretary Tom Vilsack in Washington recently to negotiate tra catfish exports, state-run Vietnam News reported Agriculture and Rural Development Minister, Cao Duc Phat, as saying that ensuring food safety is the biggest issue affecting exports to the United States market where American catfish farmers are lobbying for a reduction in Vietnamese imports.

“The processes of producing, processing and packaging need to establish uniform standards. Tra catfish farmers must register their information to get bar codes that allow the origin to be traced,” Mr Phat said. “We need to take action to settle the current problem that processing companies do not have information about production while fish farmers do not have information about the market.”

“We need to reorganise our production and consumption process. Institutions and individuals that pollute the environment must be punished or even forced to shut down.”

Tuna fishing is one sector where standards have still to be set for product quality and sustainable fishing. In 2008 Vietnam exported tuna worth US$188 million, mostly to Japan, the United States and EU countries, up 25% compared with the previous year.

The national tuna fishing fleet consists of about 1,500 vessels though only 50 vessels are operated by registered business enterprises. Some leading Vietnamese tuna exporters favour establishing their own trade association to assist the local tuna industry’s further development.

The global economic crisis affected Vietnam’s fisheries industry in 2009. According to the Ministry of Industry and Trade, fisheries exports during the first three quarters of 2009 were $3 billion, down 9.6% compared with the same period the previous year. Exports are expected to show a fourth quarter increase due to higher demand during the Christmas period.

The United States and Japan are the two largest importers of prawns followed by the European Union, while most catfish are exported to the United States, the EU, China and Hong Kong. These countries along with South Korea and Taiwan are the major importers of other fishery exports.

VASEP forecasts that fisheries exports in 2009 will total about US$4.2 billion when figures are totalled for the year, down about 6% compared with 2008.

Exports to the European Union fell 7% to US$454 million during the first 10 months of 2009, according to VASEP, while shipments to the important Russian and Ukrainian markets plunged over 80% due to the slump in orders from each country.

Exports of tra catfish totalled around 500,000mt worth US$1.12 billion in the first 10 months of 2009, VASEP said, down 10.3% year-on-year in value. With shipments growing in the fourth quarter for the Christmas period in European and North American markets, total exports of tra catfish are estimated at about $1.3 billion for 2009, down 7% from $1.4 billion the previous year.

Government target

Meanwhile, Vietnam’s fisheries industry is on course to achieve a number of targets outlined in the government’s Master Plan for Development of the Fisheries Sector 2006-2010 which has now entered its final year. The government has set a target of 3.5 to 4 million mt annual fisheries production of which aquaculture output is due to reach 2 million mt and marine capture fisheries at least 1.5 to 1.7 million mt a year.

The government’s goal has been for fisheries production to grow by 3.8% annually from 2006 to 2010 and for the growth in export value to average 10.6% a year to achieve the medium term target of boosting the nation’s fisheries export value to US$4 billion to $4.5 billion a year.

Most marine capture fishing occurs in waters off southern Vietnam which account for over 60% of Vietnam’s marine capture fisheries totalling around 1.8 million mt a year. Waters off central Vietnam account for about 30% of the marine catch. A small share of the catch is taken in the Gulf of Tonkin off northern Vietnam.

According to official estimates, Vietnam’s fish stock stands at 4.2 million mt. With inshore fisheries showing signs of overfishing in some areas, the government’s coastal fisheries policy calls for offshore fishing to be developed while inshore stocks are better conserved and aquaculture is encouraged to further develop production and exports.

The government has set the total allowable annual marine fisheries catch at 1.7 million mt which includes 850,000mt of demersal fish, 700,000mt of small pelagic fish and 120,000mt of large pelagic fish species.

In addition to marine fish, Vietnam’s waters are home to about 1,600 species of crustaceans including marine shrimps, lobsters, crabs and other species of which 50,000 to 60,000mt can be caught each year. Also, there are many mollusc species including squid and octopus for which the allowable catch has been set at 60,000 to 70,000mt each year.

Fishing is a private sector activity in Vietnam. The vast majority of fishing vessels are privately owned as most state-run fishing enterprises have been dissolved since the early 1990s or have diversified into other business activities.

Aquaculture also has developed as a private sector industry. From 1985 to 2005 aquaculture production more than doubled each year becoming an important source of employment and foreign exchange in the process.

According to official estimates, Vietnam has about 100,000 fishing boats which the government considers is too high and is partly responsible for overfishing in inshore waters. As part of the 2006-2010 fisheries master plan, the government aims to reduce the number of small fishing boats by about 40,000 vessels. Since 2008 up to one third of the small boats have been confined to port by high marine fuel prices.

Fleet reduction target

Whether the 40,000 fleet reduction target is achieved in 2010 remains to be seen, as the Agricultural Ministry recently has asked that fewer boats be scrapped from the fleet.

According to government figures the average powered fishing boat is fitted with a 50hp motor. About 25% of fishing vessels are equipped for offshore fishing operations.

To reduce inshore overfishing the government aims to encourage fishermen to fish further offshore where fish stocks are larger. Currently most of Vietnam’s marine catch is taken in waters less than 60m deep and is considered a major cause of coastal overfishing.

To encourage fishermen to use larger fishing vessels that are better equipped for offshore fishing, the government has started to offer subsidies of about US$3,500 a year for fishermen buying new boats fitted with an engine larger than 90hp.