January 29, 2007

 

Vietnam catfish prices skyrocket despite local supply shortfall

 

 

Vietnam's tra and basa catfish prices have risen to record high levels as supply struggles to keep pace with demand, says Nguyen Van Thanh, director of the An Giang provincial Fisheries Department.

 

Tra and basa now fetch 16,000 VNA (US$1) a kilogramme in the Mekong Delta region.

 

According to Thanh, the reason for the price hike is the seasonal rise in demand in the world market over the Christmas to Tet (Lunar New Year) festive period.

 

In addition, tra and basa fish farms dipped due to ongoing investment concerns among farmers. In 2006, tra and basa prices were highly volatile, causing many farmers to shift to other sources with stable income.

 

Currently, the processing plants in An Giang are only operating at 30-40 percent capacity due to the lack of pond supply.

 

Last year, the production of tra and basa in An Giang, which accounts for 80 percent of the total production area in the Mekong Delta, was only 145,000 tonnes, down 25,000 tonnes compared to 2005.

 

Meanwhile, exports in 2006 grew by 72 percent to 94,000 tonnes, adding to price volatility in the local market.

 

The price hike hectares had a negative impact on corporate profits. Doan Toi, general director of Nam Viet, said the company hectares signed export contracts quoting the fish at 14,000 VND (US$0.87) per kilogramme.

 

At current levels, the company loses at least 2,000 VND (US$0.12) for each kilogramme it processes.

 

However, Thanh said prices should fall as demand from foreign markets, particularly in the US and Europe, go through their seasonal decline as warmer weather during the summer months means these countries no longer require to stockpile goods.

 

At current levels and forecasted price changes, the Vietnam Association of Seafood Exporters and Producers (VASEP) expects the country will achieve its export revenue target of over US$1 billion of tra and basa this year and could surpass if farmers apply stricter quality control measures for the product.

 

In 2006, Vietnam earned US$700 million in catfish which was exported to 65 countries.