Vietnamese pangasius producers turning to tilapia

“The farmers now refrain from breeding pangasius,” said a seafood specialist. “We will probably end up with only 600,000 to at most 800,000 tonnes of harvested fish this year – about half of what it was five years ago. Pangasius farmers are increasingly turning to tilapia instead.”

Tilapia is farmed in cages in the Rivers Hau and Tien, the main branches of the Mekong River. Both red tilapia (Orechromis niloticus) and black tilapia (Tilapia mossambicus) are grown in about equal quantities and, like pangasius, are mostly exported in fillet form.

According to local media, Vietnam’s tilapia exports have enjoyed strong growth during the past decade, increasing from an export value of $1.95 million in 2004 to more than $32.2 million in 2014.

In 2014, Vietnam exported tilapia to more than 60 countries, according to official sources. The USA was the key market, importing 1745 tonnes valued at $5.24 million, and accounting for 18.2% of exports, followed by Spain with imports valued at $3.7 million and Colombia with imports valued at $3.03 million. The remaining top 10 importers were the Netherlands, Belgium, Germany, Mexico, the UK, the Czech Republic and Italy.

Pangasius decline
The farming of pangasius has been in decline for several years. This is due to the strict loan policy of the Vietnamese banks whereby farmers face interest rates of up to 30% if they require capital to buy feed and juveniles in advance.

So, many private farming operations have been forced to stop producing pangasius for processing and export. Now the trade is dominated by processors who own their own farms and are able to pre-finance the farming effort out of their cash flow systems.

Unfortunately, as with pangasius, there is a shortage of funds for investing in tilapia production in Vietnam which means there is not enough fish for the industry to fulfill its export potential.

Ten years ago, the Vietnamese government began implementing a project to develop tilapia as a key aquatic export. However, output has not expanded as anticipated and hasn’t kept pace with domestic demand.

Moreover, international marketing efforts have stagnated as the industry, fraught with raw material shortages, simply isn’t in any position to make or keep large foreign commitments.

At present tilapia is aimed at a different market than pangasius which is now being sold purely on price with product quality deteriorating as producers struggle to meet buyers’ demands.

It is a niche market, according to one industry observer, and as a consequence, Vietnamese tilapia can be sold at a higher price than pangasius – at about $4.10 per kg for fish with 10% glaze and no chemicals (polyphosphates, etc) C&F in Europe.

One reason why tilapia from Vietnam is being readily accepted is that “the quality in Vietnam is far better than, for example, China which is the biggest supplier of tilapia. Vietnam is cutting out an edge in the market with ASC quality tilapia which China cannot supply.”