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Seafood industry tangled in the nets of global turmoil
The global economic crunch has bitten deep into the local seafood industry. Many processors and exporters have lowered production and cut jobs while many farmers have quit breeding fish.
Doan Toi, general director of the Nam Viet Corporation in the Mekong Delta province of An Giang, says the company has slashed 5,000 jobs, or nearly half of its workforce, over the past several months. Nam Viet, the country’s largest exporter of pangasius (tra and basa catfish), has earned more than US$200 million in export turnover this year.
Tran Thien Hai, chairman of the Vietnam Association of Seafood Exporters and Producers, says with demand low in Vietnam’s major shrimp export markets such as US and Japan, many companies have had to cut production and are trying to penetrate into other markets like Russia, the Republic of Korea and Australia.
Duong Ngoc Minh, general director of the seafood processing firm Hung Vuong Corporation in the Mekong Delta province of Tien Giang, says due to the global financial crisis, many catfish importers have failed to obtain a bank guarantee, hurting their business operations badly.
Minh also says that demand from EU importers and consumers has dropped with the euro falling against the US dollar.
He expects the catfish processing and exporting sector’s labor force to reduce by 20-30 percent in early 2009.
While tra and basa exports are expected to generate $1.4 billion in turnover this year, Minh says it would be difficult to reach even $1 billion next year if the government does not help the industry out.
Minh says many fish farmers have abandoned their vocation over the past four months after suffering big losses, and as a result, supply of the fish would drop sharply next year.
Tra and basa fish are currently priced at VND12,000-VND14,000 ($0.70-0.80) per kilogram while input costs are around VND16,500 ($1) per kilogram.
“The country’s seafood industry will continue to face difficulties, driven by the global financial crisis, until the end of 2010,” the Thoi bao Kinh te Saigon Online (Saigon Economic Times) quoted Deputy Minister of Agriculture and Rural Development Luong Le Phuong as saying at a recent seminar. The seminar covered the development of Vietnam’s seafood industry after the country joined the World Trade Organization (WTO) nearly two years ago.
The Deputy Minister says that though the seafood industry has achieved a great deal of success and gained a lot of experience after the WTO integration, it remains a vulnerable industry.
He said the ministry had asked the government to grant import licenses for unprocessed seafood products to local businesses which would process it for exports, as a measure to boost export growth.
Vietnam is also encouraging international investors to upgrade post-processing technology, he added.
Vietnam, the world’s eighth largest seafood exporter, earned $4.27 billion from exports in the first 11 months of this year.
Thanh Nien
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