As world prices peak, Vietnam runs out of shrimp to sell

Shrimp prices have spiked since the Gulf of Mexico oil spill, but Mekong Delta production is at a cyclical low, alas!

CEO Le Van Quang of Minh Phu Seafood Company says there’s been a surge in demand by US shrimp importers since the oil spill disaster cratered Gulf of Mexico production. Prices offered for black tiger shrimp have reached $13 per kilo, an increase of 30 percent over 2009 levels and the highest price seen in ten years.

Hot weather and decreased production in competing countries are also pushing prices up. An epidemic has killed 80 percent of Indonesia’s farmed shrimp, and 20 percent in Thailand and Malaysia. Production is down in India and Bangladesh too.

A golden opportunity missed

Seafood companies say that they are missing fat profits because demand has outstripped supply. Lam Ngoc Khuan at Phuong Nam Seafood Processing Company (Soc Trang) says that foreign partners are eager to place orders, but the company dares not sign new contracts.

Khuan says his company is scouring Ca Mau and Bac Lieu province for more shrimp. It has only been able to buy 40 tonnes per day, though the factory can process and pack 120 tonnes per day.

Other Mekong Delta companies such as Fimex Vietnam, Stapimex, Kim Anh, Thai Tan and Ut Xi tell the same story: there’s only enough shrimp for them to run at 20-30 percent of the capacity.

Ta Minh Phu, Deputy Director of the Bac Lieu province’s Department for Agriculture and Rural Development, says that hectarage devoted to shrimp aquaculture has been reduced in the last few years because prices were depressed below the cost of production for many farmers. Now they do not have capital to resume farming, and banks are reluctant to provide loans.

Mekong delta production is expected to rebound from September 2010.

Tags: Vietnam Seafood, Vietnam seafood sector, Vietnam shrimp exports