Tra fish export: VASEP should take price stabilisation factors into account

The Vietnam Association of Seafood Exporters and Producers (VASEP) has recently issued a notice informing that the floor export price of tra catfish (pangasius) will be set at US$2.8 per kilo in 2011. This introduction of floor price regulation aims to deal with many barriers on the way to bring Vietnamese fisheries industry to the world level and to ensure the profit-making operations of farmers and businesses.

Aquatic product export meets difficulties

According to VASEP, the fisheries industry has repeatedly encountered price-related difficulties since the start of this year, caused by importing countries. Specifically, the United States Department of Commerce (DOC) has recently issued an administrative conclusion, threatening to impose antidumping tariffs of up to 136 % on pangasius imported from Vietnam. In case the decision is legislated, Vietnamese exporters will have to pay a tax amount much larger than their revenues in this market. If the proposed tariff rate is approved in March 2011, the Vietnamese tra catfish cannot penetrate into the US market. Before this complex development, VASEP will have to fight fiercely with the U.S. Department of Commerce on various legal aspects related to tax rates and minimum selling prices. This is not the first time Vietnamese enterprises face protectionist barriers in the U.S. The current matters are how much it needs to take action against DOC’s conclusion and what the Vietnamese fisheries sector receive from the action?

According to comparative figures from many seafood processors, in 2005, the exporting price of finished fish products was US$3 per kilo and the raw material price was VND12,000 (less than US$1) per kilo but the figures are US$2.4 and VND15,800 in 2010, respectively. According to some insight surveys, many markets can accept the price rate of US$3 per kilo but they need a wider variety of Vietnamese products with higher quality.

In fact, when Vietnamese enterprises encounter barriers from foreign partners, they will label all responsibilities on their partners instead of looking at themselves. This has led to enormous damage of intangible assets such as brands and images that the Vietnamese fisheries sector has spent much time, effort and money to build up.

Direction in the future

In spite of confronting trade remedies from foreign partners, Vietnam still cultured 2 million tonnes of aquatic products in the year to September and earned US$3.5 billion from aquatic exports in the first nine months. Thus, the aquatic export turnover is estimated to reach US$4.815 billion this year, up 14 % year on year. This good signal will create a driving force for the Vietnamese fisheries sector to weather obstacles and difficulties ahead. At present, it is important that tra fish companies will share an action and should not act separately. According to some sources of information, antidumping tax is applied to four or five companies, not all. The very self-determined price is attributed to lead to this reality.

Besides, Vietnamese seafood companies should search for new potential markets in the world. Apart from traditional markets, they should pay more attention to new markets like Latin America and the Middle East. Asia, with its fast-growing population, is a potential market. In Europe, consumers are keener on natural aquatic products because of high nutritional value.

In addition to the above adjustments, VASEP also put forth four groups of macro measures to the fisheries industry: Increasing the average exporting price of Vietnamese tra catfish; stabilising the input; enhancing product quality; and boosting advertising and trade promotion. – VCCI

Tags: Tra fish exports, VASEP

Posted by VBN on Oct 29 2010. Filed under Sea food. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry