July 14, 2008

 

Malaysian government earmarks aid funds for troubled seafood industry

  

The Malaysian government will soon be releasing a finance package for the seafood industry, as the EU imposed a temporary ban on Malaysian fish products and banks are badgering local manufacturers and exporters for the repayment of loan interest.

 

The EU has imposed a temporary ban on imports of Malaysian fish products after Brussels found that some Malaysian seafood exporters failed to comply with the union's health standards. That is despite Malaysia suspending seafood exports last month to the EU on the hope that it could buy some time to meet EU health standards in six-months' time.

 

The export restriction has led to many companies being unable to repay the loans, although each seafood company has stocks worth about RM15-20 million bound for the EU, where customers are waiting to stock up for the summer holidays, according to Ch'ng Huck Theng, spokesman of the Malaysian Frozen Foods Processors Association.

 

Ch'ng said the seafood industry hoped that the government would intervene to ask the banks to stop chasing seafood firms for payments at least temporarily and to inject at least RM 1.5 billion (US$464 million) into the finance package in the form of soft loans.

 

The health and agriculture-based ministries said a finance committee would help them to secure soft loans or credit facilities, while a technical committee would assist companies in the upgrading of facilities and operations to meet EU standards.

 

The industry also hopes that the government could upgrade the seafood processing facilities in compliance to EU standards by month's end, Ch'ng said.

 

The seafood industry would harvest about 170,000 tonnes of farmed prawns per day next month and if they were still unable to export to the EU, businesses of the farms would be affected, Ch'ng said.

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