July 22, 2010

Vietnam's shrimp shortage contrasts with tra export boom

Some shrimp processors are running at one-third capacity due to the shrimp shortage while tra fish (pangasius) exports have boomed due to a focus on quality.

Shrimp and tra fish constituted almost 70% of the country's seafood exports in 2009. Exports have been growing since, but low shrimp stocks are affecting processors.

The Mekong Delta has exported over 300,000 tonnes of tra fish in the first half of this year for US$640 million. The region has thereby attained over 50% of its 2010 target, obtaining a 19.4% boost in quantity and a 11.6% amplification in value despite a low global prices, according to reports.

In the first half of this year, exported shrimp prices escalated 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 numerous plants in the Mekong Delta and the central region are processing at 30-50% capacity due to the shrimp shortage caused by bad weather, seasonality and climbing demand.

Only a small amount of Vietnamese shrimp processors and exporters own farms, and they choose 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 explained.

Many shrimp factories have stopped working since February, when El Niño pummelled shrimp farms. Some factories are processing imported shrimps and switched business strategies while they wait for next shrimp season.

Tran Van Linh, director of Thuan Phuoc Seafoods and Trading Corporation in Danang City, informed that the drastic shortage in the central region led him to sign bigger contracts. This shift has helped him retain 60-70% of capacity at his factory.

Additional Vietnamese seafood producers are acquiring international quality certificates to draw major markets such as the US, the EU and Japan, according to VASEP.

Vietnamese tra fish and shrimp exporters have seen plentiful temporary embargoes in the past from Russia and the US due to microorganism or antibiotics contamination. Increasing numbers of Mekong Delta producers and exporters have thus been applying for quality certificates such as EurepGAP, GlobalGap and HACCP to meet higher quality requirements.

The government anticipates that tra fish will remain a key export product and approved a project to develop tra production and sales in the Mekong Delta until 2020. The government will invest over US$42 million.

The total output for 2010 is forecast to swell to 1.5 million tonnes worth US$1.5 billion.

In the first half of 2010, Vietnamese seafood processors exported US$1.83 billion of products, a 18.5% increase versus last year. The Ministry of Industry and Trade expects total seafood exports to reach US$4.7 billion, a 6.8% rise from 2009.