Vietnamese shrimp producers in danger of losing export markets

Published on
July 14, 2017

If the shrimp industry in Vietnam does not change its practices soon, it faces collapse and a possible government bailout, according to a senior Vietnamese official in the country's Department of Animal Health, which oversees the country's aquaculture industry.

The department's head, Phạm Văn Đông, issued the stark warning at a seminar on establishing a disease-free shrimp production chain for export in Ho Chi Minh City earlier this month, as reported by Vietnam News. Phạm said earnings from shrimp exports have increased significantly in recent years, creating a sense of complacency about the many challenges facing the industry due to new trade challenges, as well as the impact of climate change and disease.

Increasingly strict technical barriers related to disease and antibiotic residues have been erected by importing countries that are becoming a major threat to Vietnam's current shrimp exporting system, he said.

Recently, six big importers – Australia, South Korea, Saudi Arabia, China, Brazil, and Mexico – have said they will only buy products with disease-free certification in accordance with World Organization for Animal Health regulations, or products recognized as free of diseases by their authorized agencies. Combined, these markets account for 25 percent of Vietnam’s total shrimp exports, worth USD 800 million (EUR 701 million) annually.

Shrimp processors and exporters are deeply worried about the disease-free certification requirement, according to Trương Đình Hòe, general secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP), said. It will hard for them to meet the demand in such a short time, he said.   

Đặng Quốc Tuấn, deputy general director of Vietnam-Australia Seafood Corporation (Việt-Úc Seafood), said the survival rate of shrimp farmed in Vietnam is very low – at just 25 to 30 percent  – due to the low professionalism of the farmers. Vietnamese shrimp mainly competes on price, and the new regulations mean they cannot be exported whatever their price, he said. 

The external pressure means the industry will be forced to change, Nguyễn Văn Long, head of the Department of Animal Health’s seafood veterinary division, said.

The department has had a program to enable firms to meet regulations set by importing countries since 2014, but businesses haven’t taken advantage of it – only Việt-Úc Seafood and Huy Long An Company have participated in the program to develop disease-free shrimp breeding facilities, Nguyễn said. One other company, Việt-Úc Seafood, is close to meeting the criteria to be recognized by animal health departments, Nguyễn added.

With the small average scale of production, farmers and businesses in the country are generally not aware of the importance of building disease-free shrimp breeding facilities. But if the industry persists with its current production methods, and if Vietnam does not quickly adopt comprehensive national measures, exporters will certainly face extreme difficulties – and the industry will need to be rescued by the government – sooner rather than later.

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