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Vietnamese exporters scrambling for orders, forcing export prices down
Despite the sharply increasing demand for tra fish in the world market, Vietnam’s export prices are decreasing. It’s because Vietnamese exporters deliberately force the export prices down to to become more competitive.
Analysts have rung the alarm bell over Vietnam’s tra fish exports. Vietnamese enterprises are offering surprisingly low export prices, while the quality of exports has downgraded, thus badly affecting the brand of “Vietnam’s tra fish” in the world market.
The tra export price has plunged to the deepest lows, according to Nguoi lao dong newspaper.
Fish exported at any price
According to the Vietnam Association of Seafood Exporters and Producers (VASEP), a lot of exporters have deliberately lowered export prices in order to compete for orders.
Truong Dinh Hoe, Secretary General of VASEP, said in the United States that Vietnam’s tra fish price decreases by six percent per annum, while the prices have also been decreasing significantly in other markets such as Europe, the Middle East or Egypt. More and more enterprises, including purely trading companies (i.e. not producers) have jumped on the bandwagon to export tra fish, thus making the competition stiffer.
In the last few years, the Middle East imported 80,000 tons of tra fish a year from 50 Vietnamese enterprises. However, the number of exporters to the market has since soared to 100. These enterprises have to compete fiercely with each other, thus forcing the export prices down.
According to Nguyen Thi Anh, Director of Sopico, more and more workshops and export companies have been established recently. In a ward of My Tho City in Tien Giang province alone, there eight workshops. Even the enterprises, which do not have processing factories, also collect low quality materials. They have them preliminarily treated at other workshops, and then package the products and export at dirt cheap prices $1.6 per kilogramme. Meanwhile, Anh said, the export price of big companies is no less than $2.5 per kilogramme.
According to Tran Duy Hien, Deputy Director of Docifish, said that there are only 100 processing factories, but there are up to 200 trading companies, which export ready products. Meanwhile, there is no regulation controlling such companies which has created a chaos in the market.
Nguyen Van Kich, General Director of Cafatex, said many enterprises are trying to export products without regard to the price. Especially, they accept payment on credit in order to get the orders. If the tsituation does not change, Vietnam’s tra fish farming and processing industry will suffer.
It is expected that tra fish exports to the US in the last months of 2010 and first months of 2011 will drop significantly, since the US has declared the anti-dumping tax rate of up to 130 percent on frozen fillet products.
Floor export price to be set
VASEP’s Chair Tran Thien Hai said the association and 20 leading export companies have agreed to apply four measures to boost exports in 2011. One of the measures is to set up the floor export price.
In the immediate future, according to VASEP, the floor prices will be set up for the EU, the US, and the Middle East. According to Duong Ngoc Minh from VASEP, the floor export price of $2.8 per kilo will be applied to the EU, Russia and Middle East, while the domestic floor material price will be at 20,000 dong per kilo.
Since the export prices have been decreasing, enterprises have lowered the prices at which they collect materials from farmers. As the result, farmers cannot make profit. The loss of 2000-3000 dong per kilo has forced many of them to give up farming
As the result, the demand for fish among the importers have risen. It is expected that in 2011, the fish shortage at processing factories will reach 30 percent.
vietnamnet, NLD
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