Things are getting desperate for Vietnam’s pangasius industry. On the one hand, sales by wholesalers, retailers and foodservice operators are suffering badly following the “Pangasius Lie” TV program that aired in Germany last month. On the other hand, sky-high production costs are forcing farmers out of business in Vietnam.
During the past few weeks, consumer demand for pangasius in northern Europe has nosedived, particularly in Germany.
“Nobody in Germany wants to touch it,” said Herby Neubacher, a former German journalist and now a seafood consultant in Vietnam. “The WWF did a real bad job on pangasius when they made this program.”
Immediately after the program, one international retail chain stopped supplying pangasius to its stores in Denmark and Norway. Now the giant Metro retail and wholesale/cash-and-carry group has stopped selling it in Germany. Metro has the largest market share in Germany and is the world’s third largest retailer.
And the effect of the Pangasius Lie continues to be felt by consumers. Because of the views expressed in the program, a top German restaurateur called pangasius “this trash fish from Vietnam which tastes like newspaper” in his TV show, which has millions of viewers.
When questioned about the Pangasius Lie, which he admitted he hadn’t seen, Jose Villalon, managing director of the World Wildlife Fund aquaculture program in the United States, was dismissive of any harm it had caused the pangasius industry. “In the end it will be for the good,” he said. “It will lead to a significant amount of certification in Vietnam.”
Villalon said that Catherine Zucco, the WWF “fish expert” who denigrated pangasius throughout the 30-minute program, told him that the TV channel had edited out references to the WWF’s Aquaculture Dialogue, which will lead to the Aquaculture Stewardship Council’s pangasius certification program. (Click here to read Jose Villalon’s 18 March letter to the editor, titled “WWF ‘extremely’ committed to aquaculture.”
However, there is no indication that the WWF will try to correct the negative image of the Vietnamese industry caused by the program. It will take a long time to restore consumer confidence in pangasius in northern Europe, a key market, particularly since the Vietnamese themselves are not proactive in attempting to portray a positive image for what has always been considered an acceptable alternative to traditional whitefish species.
But there is positive news. Last week, it was announced that another 53 Vietnamese seafood exporters had gained access to the European market. This makes 379 Vietnamese firms that meet the exacting conditions for processing and exporting pangasius products to the EU.
Strict standards are also being put in place for farming pangasius. Farms are now being certified by organizations such as GlobalGAP, the Global Aquaculture Alliance, Friends of the Sea and Naturland. The Aquaculture Stewardship Council is gearing up to begin certification as well.
It is not just the image of pangasius that has taken a battering. Pangasius is no longer the cheap fish to which consumers around the world have become accustomed. European importers are now having to pay around USD4 CIF per kilogram for IQF pangasius fillets, a 50 percent increase compared to 2009, while in the United States prices now top USD 4 per kilogram.
The record high import prices have been caused by a shortage of raw material to process. The price of feed, which constitutes 70 to 80 percent of the cost of farming pangasius in Vietnam, has increased by more than 20 percent. The interest rate on bank loans required for purchasing feed and juveniles is now a whopping 30 percent.
This has led to a dramatic decrease in the volume of pangasius being farmed. It is estimated that 600,000 to 700,000 metric tons will be produced this year, compared to 1.2 million metric tons last year.
Truong Dinh Hoe, general secretary of the Vietnam Association of Seafood Exporters and Producers, said that almost all pangasius exporters are now operating at only 30 to 40 percent of processing capacity because of the lack of fish.
Hoe said he is optimistic about the “key export market of the EU,” because of its economic recovery. Whether his optimism will be justified remains to be seen. There will be some interesting conversations at Vietnamese stands at the European Seafood Exposition in three weeks.
