Seafood firms concerned as inputs flow to china

With Chinese traders snapping up many seafood and rubber products in large quantities, many domestic manufacturers are pushed to the verge of shutting down production due to severe lacks of input materials, Nguoi Lao Dong newspaper reported.

According to the Vietnam Association of Seafood Exporters and Producers (VASEP), more than 50 percent of the seafood manufacturers have to reduce or even temporarily halt production since most raw materials have been purchased by Chinese traders.

Nguyen Thu Sac, VASEP’s deputy head, said the Chinese businessmen have even approached Vietnamese fishermen amidst the sea besides offering to buy up inputs at ports and on land.
She said these foreign traders offer very competitive prices and have so far ‘ousted’ 150 domestic firms.

Nguyen Dien, director of Da Nang-based Procimex Corporation, said his company fails to compete with Chinese traders though it is willing to buy at high prices.

Some seafood processing companies said the Chinese traders will buy seafood directly from domestic fishermen and then illegally export it to China to evade taxes.

To cope, Sac called for imposing a ban on seafood exports like Indonesia.

Rubber sector depends on Chinese, too

According to the Vietnam Rubber Association (VRA), domestic rubber raw materials can be exported both legally and illegally to China.

But Chinese traders prefer the illegal path since this will help them evade both export taxes in Vietnam and import duties in their home country, lamented Nguyen Thanh Minh, director of the Long Binh Rubber Company.

Many Vietnamese rubber manufacturers have complained they could not buy raw rubber from the domestic market but have to import at high prices instead.

Dinh Ngoc Dam, director of Da Nang Rubber Company, said domestic firms could hardly get the materials from VRA’s members since companies belonging to this association prefer exports.
“Rubber for export is tax-free, while rubber serving the domestic market is taxed at 5 percent, which will discourage the domestic rubber consumption,” Le Quang Thung, VRA’s head explained.

According to Tran Thi Thuy Hoa, VRA’s general secretary, rubber exports to China accounts for 60 percent of Vietnam’s total production capacity of 780,000 tons this year.

Analysts thus warn the domestic rubber industry against a too heavy reliance on Chinese traders.

The Vietnam Rubber Association has also instructed its members to search for other alternative markets.

Vietnamese enterprises would be heavily damaged if Chinese traders abruptly end purchasing or change their tax policy when export prices rise, experts warn – Tuoitre

Tags: Vietnam Seafood, Vietnam seafood exports