July 19, 2010

 

Malaysia's frozen seafood exporters still waiting for financial aid

Stricken frozen seafood exporters in Malaysia are still waiting for MYR500 million (US$156 million) in loans promised to them by former prime minister, Tun Abdullah Ahmad Badawi.

 

These exporters, who have been banned from exporting seafood to the EU for over two years, are at their wits end as the promised financial aid has not been forthcoming.

 

Since March 2009, only six companies out of the 43 seafood exporters in Malaysia are allowed to export to the EU.

 

Sources said that according to the Ministry of Finance, the money had already been deposited with Agro Bank which had been entrusted by the government to disburse to those affected by the EU ban but the money had yet to be released.

 

One of the exporters, who declined to be named, said since the EU ban on June 17, 2008, many of the companies had to reduce their operations or even close down. The financial aid was promised in 2008 to help them tide over until the EU ban was lifted.

 

Last year in July at a press conference, the Malaysian Frozen Food Processors' Association (MFFPA) had appealed to Prime Minister Datuk Seri Najib Razak for help.

Despite the intervention of several ministries, the disbursement of the loan has remained unresolved for more than two years.

 

Seafood export is the second largest food export in Malaysia, generating billions of ringgit and the companies which are banned by the EU employ thousands of workers, many of whose livelihood now hangs in the balance due to the uncertainty faced by the industry.

 

The ban on the exports has been blamed on deficiencies not rectified by the respective authorities to meet standards set by the EU's Food and Veterinary Office (FVO) during an inspection in March 2008, despite being forewarned in 2005.

 

When the ban started, the Cabinet had approved MYR1.5 billion (US$470 million) to help the seafood-processing companies, aquaculture shrimp farms and fishing vessels.

 

While subsidies were given to shrimp farmers and loans granted to fishermen to upgrade their fishing facilities, exporters have been left in the lurch. Sources said since the ban, the exporters had tried to penetrate new markets besides the EU but had been hampered by inadequate funds.