June 28, 2012

Vietnam's tra fish exporters on price undercutting race

Truong Dinh Hoe, general secretary of the Vietnam Association of Seafood Exporters and Producers (Vasep) said that as many exporters are in a race to sell their fish at low cost, tra fish price undercutting has reappeared to haunt the industry.

Speaking at a recent press conference on the 2012 Vietnam Fisheries International Exhibition (Vietfish 2012) that opened in HCMC Tuesday (June 26), Hoe noted tra fish importers seemed to be fed up with what exporters are doing to eliminate their rivals.

Statistics from Vasep show that this year fish exports to the EU, which used to contribute a staggering 40% of the country's total seafood export revenue, have dropped 12% from the same period last year.

Hoe said, "The first thing many tra fish exporters will think about when they meet their import partners is to lower prices. This has led foreign buyers to delay signing contracts in anticipation of a further price fall, he explained. "The price of tra fish fillets should range from US$2.7-2.8 per kilogramme if exporters want to keep their business afloat", Hoe reckoned. But there are exporters willing to offer a lower price.

Duong Ngoc Minh, board chairman of Hung Vuong Corporation, said difficulties sparked by high interest rates have forced processors and trading firms to offload their stocks.

The material fish price in the Mekong Delta has dropped sharply, now only VND21,000 (US$1) per kilogramme of grade-one fish, and with such a low price, farmers incur losses on rising animal feed prices.

Hoa said the association would hold a conference next month to discuss the possibility of introducing a floor export price as a solution to the price undercutting frenzy.