July 9, 2008

 

Vietnam catfish industry's slump continues amid government intervention

 

 

Despite last month's release of an emergency fund by the Central Bank to support Vietnam's catfish industry from further decline, farmers continue to reel from low prices and oversupply.

    

The State Bank of Vietnam (SBV)'s VND1 trillion (US$61.54 million) fund is meant to help catfish processors and exporters buy tra and basa fish from farmers struggling with tumbling prices and supply glut.

 

Catfish prices have plummeted to VND13,500-13,800 ($0.82 - 0.84) per kilogramme from an average VND15,500 last month.

 

The Ministry of Agriculture and Rural Development however said only 22 percent of the fund has been disbursed as enterprises have been reluctant to borrow funds with credit rates reaching up to 18 percent.

 

The Hau Giang provincial administration said out of the VND100 billion ($6.3 million) earmarked for the province, only VND15 billion has been lent.

 

Provincial deputy leader Tran Thanh Lap said processors and exporters have bought just 920 tonnes out of the 6,000 tonnes farmers have harvested due to slow production over cash crunch.

 

In Dong Thap Province, authorities said only VND81 billion has been loaned so far out of the allotted VND200 billion.

 

But even that went mostly to farmers and not businesses, they added.

 

Huynh Thai Nang, vice chairman of the An Giang Province People's Committee, said a shortage of workers was another problem facing catfish businesses.

 

He cited the example of Nam Viet Company which only hired a few hundred workers from the required 10,000 employees.

 

He also lambasted the frequent and unexpected power outages which were taking a toll on the businesses.

 

Power cuts often last the whole day and fish die in large numbers without the electricity needed to cool their tanks, he said, forcing processors to reduce production to 50-60 percent of capacity.

 

These problems mean processors buy less fish from farmers, he said.

 

Leaders of other provinces have echoed the same sentiments, stating they are facing similar problems.

 

Around 323,000 tonnes of catfish remain in stock in the delta.

 

Most catfish firms said they prefer deferred payment deals with catfish farmers instead of borrowing money from banks.

 

Moreover, keeping the fish is harder since they cannot afford to feed them, he said.

 

Adding further headache is the rising cost of feeds.

 

Vo Thi Phuoc Hong, a farmer in Dong Thap Province, said she and others have been selling their stocks even if it meant getting VND12,000 per kilogramme.

 

But businesses are refusing to buy even at these prices.

 

MARD minister Cao Duc Phat instructed agencies concerned to remain in close touch to assist the farmers.
 
 

He asked VASEP to persuade its members to pay at least VND14,000 for catfish, and mull over measures to decrease feed prices.