June 28, 2011

Oversupply of tra in Vietnam causes price drop

Despite rising production costs, the price of tra catfish in Vietnam has fallen sharply by VND3,000-5,000 (US$0.15-0.24)/kilogramme due to an oversupply of large fish.

After rising to VND29,000 (US$1.41)/kilogramme in April, wholesale prices for tra were now as low as VND24,000 (US$1.17)/kilogramme, causing sizeable losses to breeders, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).

Nguyen Van Kich, general director of Cafatex, a seafood exporter based in the southern province of Hau Giang, said prices began to plunge on the EU market after the annual seafood trade fair in Belgium, falling from US$3.40-3.50/kilogramme on average to US$3.20/kilogramme.

VASEP vice chairman Duong Ngoc Minh said that after the trade fair, breeders held onto stocks, expecting the export price to rise.

This resulted in an oversupply of large fish, with farms ending up with 70% of their stock in fish weighing 1-1.1 kilogrammes per unit while 70% of market demand was for small-sized fish weighing 700-850 grams per unit, Minh said.

To keep prices from falling further and protect the interests of breeders, tra exporters have agreed to maintain floor prices in the second half of the year, Minh announced at a press conference in Ho Chi Minh City.

The move followed a June 20 meeting among the 25 leading exporters and the fish breeding associations of An Giang and Dong Thap provinces, in which they had agreed to a free-on-board price of US$3.30/kg of trimmed filet and US$2.30 of untrimmed for all markets except the US, Minh said.

They also agreed to buy fish weighing up to 850 grams at a price of at least VND26,000 (US$1.26)/kg, he added.

Tra exports totalled 263,000 tonnes in the first five months of this year, worth US$672 million, an increase of 4.7% in volume and 24.7% in value, Minh said.

VASEP has recommended that the State increase oversight of the tra market in order to avoid dumping of low-quality fish on export markets.