Shrimp processing plant. (Photo: Stock File)
Shrimp exporters face market challenges
Tuesday, June 28, 2016, 21:30 (GMT + 9)
Shrimp processing sector in Mekong River Delta have been forced to reduce capacity to 50 or 60 per cent due to the lack of capital to buy raw material.
In addition, there have been other challenges such as mass shrimp deaths in the central part of the country and growing competition from Chinese entrepreneurs, who also seek to buy raw material for their business, VietnamNet Bridge reports.
Market statistics reveal that the shrimp price has been increasing rapidly. White leg shrimp is priced at VND 100,000 (USD 4.4) per kilo (100 shrimp per kilo) and VND 120,000 (USD 5.3) (larger size - 70 shrimp per kilo), while the common tiger prawn price has exceeded the VND 300,000 (USD 13.3) per kilo threshold (30 shrimp per kilo).
And although there are processors who are willing to pay high prices, production drop has become an obstacle.
According to the Department of Agriculture and Rural Development of Ca Mau, the province with the largest shrimp cultivation area, the total shrimp output in the first five months of the year was 134,000 tons, just fulfilling 40 percent of the plan.
In this regard, Le Van Quang, deputy chair of the Vietnam Association of Seafood Exporters and Producers (VASEP), said Vietnam’s shrimp industry had been unstable in the past few years because of high prices and low competitiveness. Vietnam’s exports are meeting difficulties in the US, EU and Japan, Than Nien Daily reported.
Furthermore, there are countries that have decided to inspect Vietnamese shrimp imports. That is the case of Japan, who now wants to examine 100 per cent of shrimp consignments from Vietnam, which has pushed the export prices up and weakened the competitiveness. And The EU has also given warnings about the antibiotic residue in seafood exports.
Though the Trans-Pacific Partnership Agreement is looming, few Vietnamese businesses have plans to switch from subcontracting to direct exports or reduce their heavy reliance on feedstock imports or increase exports of processed goods to improve value addition.
This situation has caused fears that Vietnam is unlikely to derive the maximum benefit from the trade pact.
A survey of 1,500 enterprises by the Vietnam Chamber of Commerce and Industry (VCCI) in April found that only 11.6 percent plan to change their production mode in the next three years to improve value addition, Nguyen Thi Thu Trang, head of the VCCI’s WTO Center, said.