July 21, 2010

Vietnamese shrimp processors forced to run low

 

Some Vietnamese shrimp processors have been forced to run at one-third capacity due to shrimp shortage.

Last year, shrimp and tra fish made up nearly 70% of Vietnamese seafood exports. Exports have been growing this year but processors now face shrimp shortage from farmers. In the first half of 2010, exported shrimp prices increased by 84% in France, 20% in Japan and 7% in the US.

Vietnam Association of Seafood Exporters and Producers (VASEP) Secretary General Truong Dinh Hoe said that many factories in the Mekong Delta and the central region are processing at 30-50% capacity because of the shrimp shortage. The shortage is due to bad weather, seasonality and increasing demand.

A small number of shrimp processors and exporters in the country have their own shrimp farms, preferring to buy from private shrimp farmers.

"Shrimp prices are unstable compared to other export products like tra fish. Shrimps are very sensitive to weather change, environment and diseases, which is why processors like to pass the buck to farmers," Hoe said.

Many shrimp factories have stopped working since February due to El Nino weather conditions. Some factories have switched to processing imported shrimps and changed business strategies while they wait for the next shrimp harvest.

Director Tran Van Linh of Thuan Phuoc Seafoods and Trading Corporation in Danang City said the severe shortage in the Central region forced him to sign bigger contracts.

"Big contracts mean we can pay farmers more and boost our competitiveness," he said. The shift in focus has helped him maintain 60-70% factory capacity.

One of the biggest shrimp growing provinces in the country, Ca Mau Province, the shrimp buying price has increased by 15-20%. But dozens of factories have closed down. Ly Phuoc An, Phu Cuong Jostoco director in Ca Mau Province, said he had to choose a cheaper shrimp as his main product because it was more available. An said that he has found new markets so that he can survive until there's more shrimp.

"Demand from European countries has decreased considerably since the financial crisis and the euro weakened. Markets shifted to Japan, Taiwan and only a few European countries," An added.