April 30, 2009

Vietnamese seafood exporters are facing a critical shortage of raw shrimp that may last several months, the Ministry of Agriculture and Rural Development (MARD) said. 

 

MARD said after incurring losses last year, many farmers have stopped breeding shrimp and the area under shrimp farms shrank 8 percent in the first quarter.

 

In addition in the Mekong Delta regions, more than 264,500 hectares of shrimp ponds in Ca Mau Province and another 125,000 hectares in Bac Lieu Province have remained idle since the beginning of this year.

 

Last year, the price of shrimp dropped to VND55,000 (US$3.09) to VND60,000 (US$3.37) a kilogramme at times, but they have risen to VND140,000 now.

 

The ministry said many processors have even offered to pay shrimp farmers more than their export prices to keep their commitments to long-term foreign clients.

 

Minh Hai Seafood Company director Tran Thien Hai said farmers have been able to supply only 40 percent of the shrimp his company needs of around 50 tonnes a day recently.

 

The Vietnam Association of Seafood Exporters and Producers (VASEP) said 35 percent to 40 percent of the shrimp processing plants in the Mekong Delta have cut back on production this year because of raw material shortage.

 

According to MARD, despite high prices now, many farmers are reluctant to start farming shrimp again because of a cash crunch, adding that the shortage could persist for the next several months.

 

Shrimp can be farmed throughout the year in the Mekong Delta and farmers can start harvesting their crop after 4-5 months.

 

MARD deputy minister Luong Le Phuong said the current shrimp shortage is also due to farmers not using the correct technique, in which many bred the creatures in polluted waters, killing many of the shrimp.

 

Hai, who is also VASEP chairman, said processors' demand for raw seafood is not being met, as demand grows at a minimum of 20 percent a year, the supply is only growing at just 7-8 percent.

 

He also said 90 countries and territories imported shrimp from Vietnam last year but this year only 29 have; pointing out that the shortage of raw materials is one of the main reasons for the drop.

 

Figures from MARD show seafood exports in the first quarter dropped 7 percent from the same period last year to US$744 million.

 

The government predicts overall export growth to slow to 13 percent this year from 29.5 percent in 2008 as the economic downturn hits demand in key markets like the US, Europe and Japan.

 

MARD said it has asked the government to abolish import tariffs on several raw seafood items to help processors.

 

Phuong also said his ministry and VASEP would ask processors to sign contracts with shrimp farmers and pay them an advance.

                 

US$1 = VND17,785 (Apr 30)