October 3, 2012

 

 

In the first eight months of the year, Vietnam's seafood exports reached US$4 billion, up 5.8% on-year, but most farmers and small processing firms in the industry are suffering.

 

Shrimp and tra fish are the two big export earners in the sector, but many farmers cultivating them have suffered losses because of low prices, diseases and high input costs.

 

Nguyen Khac Phuc, a farmer in Hong Ngu Town, the main tra fish farming area in Dong Thap Province, said "The price of tra fish that weighs less than one kilogramme has recently gone down to VND22,000-22,200 (US$1.05-1.06) per kilogramme, while those that weigh more than one kilogramme each are priced at VND19,500-20,000 (US$0.93-0.96) per kilogramme. We have got great loss due to the cost price of VND24,000 (US$1.15) per kilogramme."

 

Nguyen Trang Su, deputy chairman of Hong Ngu District, where the town of the same name is located, said tra fish farmers have suffered several losses this year.

 

Many households have resorted to feeding the fish less while "waiting for the price to go up."

 

Meanwhile, many households cultivating shrimp in the provinces of Tra Vinh, Ben Tre, Soc Trang and Ca Mau are miserable because diseases have caused mass deaths in their ponds.

 

The Sai Gon Giai Phong (Sai Gon Liberation) newspaper reported earlier this week that the farmers are uncertain about continuing to farm shrimp because concerned agencies have so far not identified the disease or preventive measures.

 

The Viet Nam Association of Seafood Exporters and Producers says many of its members have faced difficulties in raising capital, finding markets and buying raw materials since early this year. At the end of the first quarter, as many as 330 enterprises had shut down, it said.

 

In recent months, 30% of factories processing tra fish and shrimp have operated at 70% of their capacity, another 30% at less than 50%, 20% at less than 30% and the remaining 20% have stopped operations. Nguyen Van Dao, general manager of the Go Dang Company, said that the problem was a glut in processing facilities shortly into the tra fish boom.

 

"Even enterprises engaged in real estate, tourism and rice trading invested in seafood processing factories because they thought it was easy way to earn profits." This engendered unhealthy competition, dumping and low quality production, affecting the reputation of Viet Nam's seafood sector as a whole, he said.

 

Furthermore, many seafood enterprises did not have the strength to survive when banks tightened credit and pushed up loan interest rates, he said.

 

Experts have also blamed the Government's management of the sector, saying it had failed to check the uncontrolled development of seafood enterprises, many of which were focused on short-term profits and not interested in investing in seafood farms and building brand names.

 

The lack of co-operation and co-ordination between farmers, traders and seafood processors has restricted the sector's development, experts say. Although Viet Nam is one of the largest exporters of tra fish, seafood firms in the country have not been able to get good prices in international markets, the newspaper cited experts as saying. It said the increase in seafood export turnover was based on quantity and not increased profit margins.

 

Dao said authorities should set standards for shrimp and fish ponds, processing factories as well as trading firms in the seafood sector so that its operations are streamlined and it can build a better reputation in the world market.