Processors run low on shrimp, tra fish exports rise

Vietnam’s two biggest seafood-export earners are on opposite sides of the coin, as some shrimp processors have been forced to run at one-third capacity, while a focus on quality has boosted tra fish exports.

Shrimp and tra fish made up nearly 70% of Vietnamese seafood exports last year. Exports have been growing this year but processors now face a shortage of shrimp from farmers. In the first half of this year, exported shrimp prices increased by 84% in France, 20% in Japan and 7% in the U.S.

Truong Dinh Hoe, secretary general of the Vietnam Association of Seafood Exporters and Producers (VASEP) said many factories in the Mekong Delta and the central region are processing at 30-50% capacity because of the shrimp shortage. The shortage is due to bad weather, seasonality and increasing demand.

Only a small number of shrimp processors and exporters in the country own their own shrimp farms, preferring to buy from private shrimp farmers.

“Shrimp prices are unstable compared to other export products like tra fish. Shrimps are very sensitive to weather change, environment and diseases, which is why processors like to pass the buck to farmers,” Hoe said.

Since February many shrimp factories have stopped working, as El Nino weather conditions have affected the shrimp season. While they wait for the next shrimp harvest, some factories have switched to processing imported shrimps and changed business strategies.

Tran Van Linh, director of Thuan Phuoc Seafoods and Trading Corporation in Danang City said the severe shortage in the Central region forced him to sign bigger contracts.

“Big contracts mean we can pay farmers more and boost our competitiveness,” he said. The shift in focus has helped him maintain 60-70% of capacity at the factory.

In Ca Mau Province, one of the biggest shrimp growing provinces in the country, the shrimp buying price has increased by 15-20%. But dozens of factories have closed down. Ly Phuoc An, director of Phu Cuong Jostoco in Ca Mau Province said he had to choose a cheaper shrimp as his main product because it was more available.

An said that he has found new markets so that he can survive until there’s more shrimp.

“Demand from European countries has decreased considerably since the financial crisis and the euro weakened. Markets shifted to Japan, Taiwan and only a few European countries.”

According to An, sourcing new markets has allowed him to ship US$5.5 million of shrimp, a slight increase from same period last year despite the current shrimp shortage.

Quality boost for tra fish

More Vietnamese seafood producers are getting international quality certificates to attract major markets including the U.S., the EU, Japan, according to VASEP.

Recently Vinh Hoan Corp, Vietnam’s biggest tra fish exporter received the Good Agricultural Practice or Global Gap by Bureau Veritas Certification (BVC) for its 40-hectare fish farm in Dong Thap Province. Vinh Hoan is the latest tra exporter to receive the certificate since NTC A Corp with its 20-hectare farm and the giant shrimp exporter Minh Phu Corp were certified.

In an announcement posted on its website, the head of Vinh Hoan said the company expected to raise the average value of its tra fish by 10- 20%, and build its quality export capacity.

After receiving the Global Gap certificate, Vinh Hoan signed a contract to provide 120 tons of tra fish to an EU customer.

Ngo Phuoc Hau, chairman of the Fresh Water Fish Committee under VASEP, told the Daily, “Tra fish exporters have shifted from buying fish from farmers to growing the fish themselves, as it’s easier to build a quality control system like Global Gap.”

In the past Vietnamese tra fish and shrimps exporters had faced numerous temporary embargoes from Russia and the U.S. because of microorganism contamination or an excess of antibiotics in the product.

As a result, growing numbers of Vietnamese producers and exporters in Mekong Delta have been applying for quality certificates such as Eu-roGap, GlobalGap, HACCP to meet higher quality requirements.

“Obtaining the quality certificate is just the beginning. In the long-term, exporters have to set up a systematic sales strategy about brand-building, marketing and distribution, to build brand names for seafood products. That’s the sustainable way for export,” he said.

The GlobalGAP certificate is designed to ensure that each step in food preparation is completed with regard for the health and safety of workers, the environment and animal welfare issues.

The Government recently predicted that tra fish would continue to be a key export product, and approved a project to develop production and sales of the fish in Mekong Delta till 2020.

According to the project, Government will invest VND800 billion or more than US$42 million. This year the total output is also expected to increase to 1.5 million tons, valued at US$1.5 billion.

In the first half of the year, Vietnam seafood processors exported US$1.83 billion, up 18.5% compared to last year. The Ministry of Industry and Trade expects total seafood exports in 2010 to reach US$4.7 billion, up 6.8% from last year.

Tags: Vietnam shrimp exports, Vietnam trafish exports