Pangasius at a crossroads

Published on
December 4, 2011

As 2011 draws to a close, it seems as though pangasius is no longer the all-popular fish that it once was. Image problems and a substantial price increase are harming Vietnamese pangasius sales, especially in Europe, which is the major market.

In official terms, pangasius is performing well. A recent report in the Vietnamese press, quoting the Vietnamese Association of Seafood Exporters and Producers (VASEP), stated that overseas sales of frozen pangasius fillets are expected to hit USD 1.6 billion this year, a significant improvement on 2010.

However, other reports from inside Vietnam indicate that all is not well with this fast-growing farmed freshwater fish.

One informed observer said sales to European countries such as the Netherlands and Germany have still not recovered from the damaging program shown on German television in March. Consumers in those countries still think that pangasius is full of dangerous chemicals.

As well as instigating the television program, which did a hatchet job on the Vietnamese pangasius industry, the World Wildlife Fund also placed the fish on its red list of species to avoid.

The WWF is not alone in this respect. Men’s Health magazine in the United States put pangasius at the top of its list of species that shouldn’t be bought. The magazine is probably not read by many fish purchasers, but the constant drip of negative publicity has a cumulative effect.

In addition to the negative image, which is putting consumers off, the price at which pangasius is exported is no longer the big attraction to major fish buyers that it once was. Used to paying less than USD 3 per kilogram for consignments, they are now being asked to pay USD 4 per kilogram. Although not expensive compared with species such as cod and haddock, this is a huge increase and means that pangasius is no longer the cheapest whitefish around.

Some retail chains say that their sales of pangasius are down 20 to 30 percent from a year ago and, in some instances, deliveries of five to six containers per month have been reduced to two. Even so, there are rumors of “several millions” of dollars-worth of pangasius languishing in European cold storage, so no new orders are being made and deliveries on existing contracts are being stretched into next year.

Not that there is sufficient fish being farmed in Vietnam to keep the processing plants working at full capacity to fulfill orders at previous years’ levels. Vietnamese press reports state that factories are working at 70 percent capacity or less and are sending workers away early with reduced pay.

The Vuong Chau Au seafood processing factory in Tien Giang province normally processes 150 to 200 tons of pangasius per day, but this has dropped to 100 tons in recent months. Even so, this factory has more fish to process than others.

“I know some factories have shut down, while other have been running at a moderate level of 50 percent of their capacity,” said Nguyen Van Ky, director of Agifish An Giang, one of the major pangasius processors in Vietnam.

While about 1.2 million tons of pangasius were being produced in Vietnam two years ago, this has now dropped to an estimated 800,000 tons. In the intervening period, the cost of feed has skyrocketed and there is a shortage of juveniles to grow on so those that are available are being offered at very high prices.

So what does the future hold for this whitefish? There are reports that some farmers are switching to tilapia now that the technology has been developed for producing bigger fish than could be grown in Vietnam before. (These fish will be aimed at the U.S. market.)

New markets for pangasius are being developed in the Middle East and South America, but these probably won’t be big enough to replace the EU if sales there continue to dwindle. Plus there could be obstacles to overcome in the United States, so sales there could slump as well.

However, the overriding problem is the lack of supplies. Pangasius farmers need more money in order to keep going, so importers will need to pay more to keep them in business. Any price increase will be passed along the chain, but consumers will not be prepared to pay more for a fish when they are not sure that it is good to eat. The boom days for pangasius could be turning to bust.

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