US seafood market opens to trade, but . . .

The BP oil spill in the Gulf of Mexico in late April 2010 has led to a shortage of seafood products in the US. Seafood producers have more opportunities to boost exports, but Vietnamese companies cannot take full advantage.

Seafood export prices rising or dropping?

According to the Vietnam Association of Seafood Exporters and Producers (VASEP), the US is importing catfish from 11 countries, but the import volume from Vietnam is the largest.

Eight percent of the shrimp consumed in the US previously came from the Gulf of Mexico, but now shrimp exploitation in the region has been prohibited. The shrimp import price has subsequently increased by 15-20 percent.

There are 10 leading companies who are exporting tra fish to the US. The biggest is Vinh Hoan Company, but they reported that, after the oil spill disaster, the export volume has increased slightly, but the price has not increased even slightly.

Viet An Company has also reported a 20 percent increase in tra fish exports to the US, with no increase in price.

Binh An Seafood Company has the highest export price at $3.493 per kilo through export contracts signed earlier. Company officials are still not sure about export prices for new contracts. One representative remarked that it is difficult to raise export prices, because it must compete fiercely with other Vietnamese catfish exporters.

Vietnamese enterprises, instead of cooperating to set high export prices, are competing to gather export contracts.

VASEP plans to hold talks with the 10 leading export companies to discuss floor prices and to propose that the Government halt extremely low-priced exports.

Vietnam must import to export

After the oil spill, Thai shrimp exports to the US increased by 16.4 percent, while Vietnam’s export volume to the US has dropped by 3.3 percent. Minh Phu Seafood Group claimed that the number of US orders is big, but Vietnamese firms dare not accept because they lack enough materials for processing.

Currently, the shrimp material price has reached its highest peak in 10 years, standing between 130,000 dong per kilo (40 shrimp per kilo) and 180,000 dong per kilo (20 shrimp per kilo), and are twice the 2008 and 2009 rates. As a result, some processing factories are reportedly running at only 30 percent capacity.

According to analysts, the shortage results from a lack of programming for material cultivating areas. Vo Hong Ngoan, well known as the ‘shrimp king’ in Bac Lieu province, noted that many farmers gave up because of losses.

Other experts argued that Vietnam still does not have reasonable program to build processing factories and material areas. Ca Mau, Bac Lieu and Soc Trang provinces alone have nearly 100 shrimp processing factories which have a combined total capacity that is double the output of shrimp cultivated.

Dai Duong Food Company General Director Nguyen Huu Thanh complained that, while cultivated areas have narrowed, more processing factories have arisen.

Secretary General of VASEP, Truong Dinh Hoe, observed that, from now to the end of the year, if enterprises want to export shrimp, they must import materials.

Tags: Vietnam Seafood, Vietnam seafood sector