Limited credit access is forcing tra fish exporters to cut back on production, even as market conditions remain favorable, an industry group said.
According to the Vietnam Association of Seafood Exporters and Processors (VASEP), 92.3 percent of its member companies need urgent loans in the second quarter, ranging from VND10 billion to VND500 billion, to buy tra fish from farmers and keep their operations running.
Ngo Quang Truong, director of Bien Dong Seafood in the Mekong Delta city of Can Tho, said after many companies in the industry went bankrupt and Bianfishco, an exporter in the city, incurred huge debts, banks have tightened lending to other seafood producers.
“Banks have asked our company to repay and reduce our debts. Without money for reinvestment, we will not have enough materials for production,” Truong said. “We are already looking at a scenario where we have to shut down and cut jobs.”
Duong Ngoc Minh, vice chairman of VASEP, said banks should not restrict lending to seafood companies, especially those that are doing good business.
Prices of tra fish in the Mekong Delta have fallen by 10 percent over the past four months, leaving many farmers with no profits, VASEP said. Many farmers and exporters, facing a serious cash crunch, have tried to clear their stock as soon as possible and even undercut each other, it said.
Experts warned that if prices do not increase, many farmers could quit the business completely after this year.
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