April 12, 2013

Vietnam sees rising shrimp prices due to competition from Chinese traders

Shrimp prices in Vietnam's Mekong Delta have been rising rapidly due to acquisitions by Chinese traders.

Nguyen Van Kich, General Director of Cafatex Group in Hau Giang province, a large shrimp cultivating area, has confirmed that since the beginning of the year, Chinese traders have been competing with local seafood processing companies for shrimps.

"Chinese traders have come directly to factories in the Mekong Delta, offering commissions and requesting factories to collect shrimp for them," he continued.

According to Chu Van An, Deputy General Director of Minh Phu Seafood Group, Chinese businessmen have injected impurities in shrimps, to increase sizes, in order to be able to sell at higher prices.

Shrimp collections by Chinese businessmen have caused difficulties for Vietnamese seafood processors and exporters.

"I have heard that a lot of enterprises which signed the contracts with the Japanese and US partners on exporting shrimp products, now cannot collect materials for processing," said Kich of Cafatex.

"They are now in the danger of breaking the contract because they cannot make deliveries on schedule," he added. "Chinese traders have collected all the shrimps, both big and small, high and low quality."

"Vietnamese workers would lose their jobs, while potential partners like the US, Japan and South Korea tend to shift to place orders with other suppliers," An warned. "Authentic enterprises would suffer from the uncontrollable shrimp collection".

According to Vietnam Association of Seafood Exporters and Producers' (VASEP) Truong Dinh Hoe, Vietnam exported US$192 million worth of shrimps to China in 2012, which is 8.6% of the total shrimp export turnover.