Seafood exporters set for a worrying 2010

Seafood exporters are not expecting a prosperous 2010 – despite an upturn predicted for the global economy.

Unfortunately there appear to be just too many problems for them to face.

We asked one exporter why he remains so pessimistic about business performance in 2010, when export markets are all expected to open more widely.

He said that his business has had to borrow money from banks at very high interest rates. It is partially because the business cannot enjoy the four percent interest rate subsidy program any more, and because banks have set higher lending interest rates.

The global economy recovery turns out not to be good news at all, because this means price increases in raw materials. Unprocessed seafood has rise by between 10-15 percent, while the price of packaging and labor costs have also both increased.

“The stronger dollar, alongside other hard foreign currencies, are making seafood companies, which mainly make payment in these currencies, suffer,” he said

While export prices of finished products have not increased, domestic material prices have increased sharply. Since the beginning of January 2010, tra fish price has increased by 1,500 dong per kilo to 16,400 dong. Lower farming has led to the lower output and shortage of materials.

According to Saigon Tiep Thi, the demand for tra filet products from the EU and other markets has not improved much. The export price remains at 2.8-2.9 dollar per kilo. Enterprises cannot raise sale prices because high prices will make them lose orders.

It’s not just tra fish price, the price of shrimp has also been on the move. The shrimp price has increased by 10 percent just within a short time.

“We still cannot see any improvement in comparison with 2009,” said an exporter in Dong Thap province

Another businessman said that he does not dare to target higher growth rate in 2010, because the high lending interest rates will make it difficult. In 2009, businesses borrowed loans at an interest rate of 0.53 percent per month only, while they now have to pay 1.5 percent per month.

In particular, they have been warned that shipping fees have risen by five percent.

Meanwhile, Vietnam has set up a target of $4.5 billion worth of export turnover for seafood products this year, an increase of $200 million over 2009.

VietNamNet/SGTT

Tags: Vietnam Seafood, Vietnam seafood exports