June 8, 2010

 

Vietnamese seafood exports hurt by weaker euro

 

 

The recent depreciation of the euro against the US dollar is causing many difficulties for local seafood exporters to the European markets.

 

The currency has fallen by more than 15% against the dollar over the last five months. This requires importers to spend more euros to buy dollars and makes Vietnamese exports more expensive, despite selling prices remaining unchanged in dollar terms.

 

Early this year, EU consumers just needed EUR1.87 (US$2.235) to buy a kilo of tra fish, but now they have to pay EUR2.20 (US$2.629) for the same quantity.

 

Many EU importers have asked exporters to cut their prices, saying they will stop imports otherwise, local seafood companies said.

 

Binh Dinh Fisheries Company director Cao Thi Kim Lan said that the company had to cut prices of some items to ensure the factory's operation. With 60% of total export revenues coming from the EU market, the depreciation of euro had badly affected her company's earnings, Cao said.

 

She said that other seafood companies were also facing the problem of rising input costs and unchanged export prices, not to mention the prices going down in certain markets.

 

The director of a Ho Chi Minh City-based seafood export company said export prices of tra fish had fallen to US$2.3-2.4 a kilo from US$2.7 early this year. Moreover, EU importers did not want to sign contracts with large volumes or long delivery times because they were afraid the euro could fall further, he said.

 

An Giang Fisheries Import and Export JSC general director Nguyen Van Ky said a drop in export prices to the EU market had caused local prices to fall from the first quarter of the year.

 

The weakened euro badly affected seafood exports to the EU markets, said Truong Dinh Hoe, general secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP).

 

Revenues from seafood exports to the EU market had risen by 17% in the first four months of the year compared to the same period last year, lower than the sector's growth rate of 20% during the same period, according to VASEP.

 

Pham Quang Dieu, director of Agricultural Market Forecast and Analysis JSC, or Agromonitor, recommended that local seafood companies strengthen exports to non-traditional and emerging markets, including the Middle East and China.

 

Russia and the US are also markets with high potential, said Duong Ngoc Minh, general director of the Hung Vuong Seafood Company.

 

Meanwhile, the country earned US$1.62 billion from seafood exports in the first five months of the year, an increase of 17.3% over the same period last year, according to the Ministry of Agriculture and Rural Development.