September 16, 2008

Tra catfish processors will have to breed their own catfish or purchase from catfish farmers under an official supply contract signed in advance, according to Ngo Phuoc Hau, vice president of Vietnam Association of Seafood Exporters and Processors (VASEP).

Since the fourth quarter of 2008, processors will not be allowed to buy catfish from non-established catfish producers in a bid to lower financial and product quality risks for both parties, Hau said.

The new model said banks will not offer loans for breeders but instead, provide capital into catfish raising. Processors will then supply farmers with fry and feed, while farmers will raise the catfish for the processors and then sell the fish supply to them under contract.

This new model aims to reduce inefficiency among farmers and processors, and to prevent future tra catfish shortage, which would stabilise catfish supply for next year's export and enable the industry to become sustainable, according to Hau.

Vietnam's tra catfish export value is expected to hit US$1.5 billion next year, up 25 percent on-year. That will require 1.2 million tonnes of input materials to produce 600,000 tonnes of tra fillets.

Catfish businesses currently supply 70 percent or 840,000 tonnes of input material required for next year's production, according to VASEP.

The remaining 30 percent will be fulfilled by signing contracts with farmers, Hau said, before warning that catfish breeders without a contract will have difficulties in finding buyers for their fish.