March 10, 2008

 

Vietnam catfish industry warns against overproduction as demand lags

 

 

Vietnam's catfish output is geared to increase 50-70 percent annually, yet market demand is estimated to expand at only 10-15 percent, an overproduction issue which threatens the industry, analysts said.

 

Seafood industry insiders are warning processors to avoid excessively increasing their output capacity.

 

Vietnam Fisheries Association chairman, Nguyen Huu Khanh, explained that there seems to be excessive supply against actual demand.

 

In the first two months of 2008, processors have enjoyed a significant growth in tra and basa exports.

 

The deputy director of the trade department in the southern city of Can Tho, Le Van Hung, estimated earnings to reach US$80 million from January to February for tra and basa exporters, twice as high as the same period in 2007.

 

Joint Stock Co. representative disclosed that his company exports to 65 countries, earning more than US$18 million in the first two months of 2008, up 8 percent from last year.

 

However, industry experts expressed concerns about the rampant construction of new processing establishments.

 

Fisheries Association statistics states that An Giang Province alone will put four processing plants into operation this year, with a total output capacity of more than 74,000 tonnes.

 

Five other projects are in the works, expected to raise output capacity to 134,400 tonnes.

 

Analysts pointed that An Giang seafood processors would therefore need 1.2 million tonnes of raw materials yearly to meet the demands of processing plants.

 

Khanh pointed that authorities in provinces that process tra and basa catfish were ignoring warnings to more closely scrutinise plans to increase output capacity.

 

Aside from lower demand against high production, a shortage of raw materials could be even tougher on the tra and basa catfish industry.

 

While Vietnam can import raw shrimp from nearby countries like Thailand and India, it has no outside source for raw tra and basa catfish as the fish are native only to Vietnam's Cuu Long (Mekong) River Delta.

 

The Ministry of Agriculture and Rural Development reported that the fisheries industry this year expects to ship 1.2 million tonnes of tra and basa catfish abroad, netting roughly US$1.2 billion, up 20 percent over last year.