Ensuring sustainable development for seafood sector

If the seafood sector is put under pressure for increases in export turnover for months and years, it will find itself in a difficult position to develop sustainably, said Nguyen Huu Dung, Vice President of the Vietnam Association of Seafood Exporters and Producers (VASEP).

Despite hitting a ten-year record high of 645,000 tonnes of Tra fish, Tra fish export earnings still failed to reach the set target for 2010.

According to VASEP, the average price of Tra fish for export in November last year was US$2.14 per kg, 3 percent less than in the same month of last year. The falling price was attributed to a strong increase in output and barriers imposed by the consumer markets.

In early 2009, in a proposal submitted to the Ministry of Agriculture and Rural Development (MARD), VASEP warned of investment exceeding breeding capacity which resulted in negative consequences. For instance, competing in both buying and selling Tra fish push export prices down.

Mr. Dung says the global demands for Tra fish in 2011 will exceed supply. However, Vietnam’s export output of Tra fish will stay just around 1 million tonnes this year, including 360,000 tonnes for export, down by nearly 40 percent against last year. Therefore, it is essential for the seafood sector to lay a firm foundation for its sustainable development, particularly for shrimp and Tra fish exports.

Vietnam’s Tra fish output accounts for 95 percent of the world market. If we only focus on developing Tra fish breeding areas, it is difficult to drive export prices up. Consequently, we should be active in balancing demand and supply to control the market, Mr Dung stressed.

VASEP has advised businesses to sign export contracts every month instead of every six or 12 months as before to control output and increase selling prices. This year, export businesses will have to stick to floor prices.

Facing a lot of difficulties

This year, seafood businesses will have to encounter a host of difficulties and challenges as the seafood sector is in a dire shortage of workforce, especially highly-skilled workers. Moreover, lacking investment capital is the biggest problem that needs to be addressed in the first place.

The Chairman of the Vietnam Food Association, Pham Van Bay, says, “Lacking capital has become a permanent challenge for us. We don’t complain about increasing interest rates but the Government should adopt capital providing policies based on businesses’ capacity for producing value added products.”

Mr. Dung says the more value added products businesses create, the easier they have access to bank loans. This will create the best possible conditions for them to produce more value added products.

To develop the seafood sector on a sustainable basis, particularly for Tra and Basa fish and shrimps, it is necessary to promote the production relationship between businesses and farmers. Businesses need to maintain relations with farmers in all areas, not just in buying and selling operations.

“Currently, businesses can ensure around 70 percent of Tra fish production. Individual farmers need to be provided with necessary breeding skills to ensure the remainder is raised safely according to the set standards,” said Mr Dung.

Asides from this, to deal with issues related to aquaculture, MARD Minister Cao Duc Phat underlines the need to prevent uncontrolled and ineffective breeding and the failure to control the quality of products and breeding environment in order to avoid affecting the prestige and production efficiency of the whole sector.

In regard to the promotion of Vietnam’s seafood trademark and image, the Head of the Aquaculture Department under the General Department of Seafood, Vu Van Dung, says most Vietnamese seafood businesses develop their own markets and build their own trademarks without paying attention to building a common trademark of Vietnam’s Tra fish.

Trade promotion does not simply means taking part in fairs, exhibitions or making fact-finding tours overseas. It is important to change trade promotion measures by inviting foreign media representatives to Vietnam to learn more about the way Vietnamese businesses are raising and producing Tra fish. Trade promotion requires a long-term or middle-term investment strategy not only in three or five years, Mr Dung emphasised. – VOV

Tags: Vietnam Seafood, Vietnam seafood sector