Unstable material supplies makes seafood industry stagger

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VietnamNet English - 73 month(s) ago 13 readings

Unstable material supplies makes seafood industry stagger

VietNamNet Bridge – Seafood exporters have been suffering heavily due to the unstable materials supply.

In December, tra fish price dropped dramatically after reaching its high peak of 29.500 dongs per kilo in November. As such, the tra material price in 2011 climbed to the highest peak in May and plunged to the deepest low in August.

Factories running at 50-60 percent of capacity

A paradox exists that when the tra price decreases, processing factories only run at 50-60 percent of capacity because they lack materials.

Duong Ngoc Minh, Deputy Chair of the Vietnam Association of Seafood exporters and Producers (VASEP) said that 70 percent of enterprises are lacking materials to process. Meanwhile, VASEP’s secretary Truong Dinh Hoe general has warned that the material shortage will last until the first months of 2012.

Minh has many times alerted about the material shortage. He said the same thing even in late July, when the fish price plummeted and farmers could not sell fish. At that time he clarified that processing factories lacked high quality materials.

High quality tra fish need to be bred following the technical procedures with standardized feed, which accounts for 70 percent of the production cost. Meanwhile, according to the Aquaculture Testing and Quarantine Center, more than 20 percent of aquatic feed samples cannot meet the registered quality.

The aquatic feed prices have increased several times so far this year. According to Nguyen Thi Xuan Thu, Deputy Minister of Agriculture and Rural Development, since there are too few laboratories, Vietnam still cannot control the quality of aquatic products.

The problem is that farmers have to bear high risk in farming, with unstable prices of materials and uncontrolled quality of feed; therefore, many of them have given up farming. After many years of developing material area, the Hung Vuong Seafood company can have 50 percent of its materials needed. Others also say they can take initiative for 40 percent of materials for processing.

Vietnamese doing the outsourcing for foreigners

Deputy Chair of VASEP Duong Ngoc Minh said Vietnam may export 1.6 billion dollars worth of tra fish this year. Despite the economic downturn, Vietnam’s main big markets still have been growing. The EU market, for example, accounts for 30 percent of the export turnover, an increase of 3 percent over 2010. The US imports 18 percent of total Vietnam’s exports, an increase of nearly 100 percent, ASEAN 6 percent, up by 45 percent, Mexico 5 percent, up by 17 percent, and Brazil 4 percent, up by 154 percent.

Vietnamese tra products have reached 129 markets where they have been favored because they allow to make a lot of different dishes, while the prices are affordable to consumers. Most recently, the US Seafood Association has sent an open letter which was published on the Wall Street Journal, protesting the US fish farmers against the installing of unreasonable barriers to Vietnamese tra farmers, while proposing to remove the unreasonable barriers.

By late 2002, Vietnamese enterprises had provided more than 30 products made of tra fish. By 2005, the figure had risen to 50. And now, hundreds of products have been made from tra, from frozen to ready made products.

There are about 155 enterprises that process and export tra fish.

According to Vietnam Report, in 2011, 35 out of the 500 biggest Vietnamese enterprises are seafood companies.

However, none of the enterprises still can sell their products directly to consumers on import markets. As a result, Vietnamese enterprises have been exporting fish in big quantities, but they cannot control the prices. Importers always keep the right to control the prices.

Therefore, Minister of Agriculture and Rural Development Cao Duc Phat said Vietnam is doing the outsourcing for foreigners. It is exploiting the natural resources and selling to foreigners for low prices, while its local residents have to bear the consequences from the environment pollution.

Thanh Mai

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