Pangasius is the moneymaker that nobody loves

Published on
November 11, 2013

“The [European] industry is not behind [pangasius] — they don’t like it and they don’t eat it,” according to an industry observer who spends time in Vietnam and has a close knowledge of the species.

Although pangasius is a remarkable source of competitively priced, boneless, skinless, white fish fillets which consumers enjoy eating, many European importers are solely concerned about how little they can pay for it. In order to achieve ultra low prices they are asking for the fillets to be tumbled in polyphosphate solution and then glazed by up to 30 percent.

It is a throwback to the days — hoped to be long gone — when, for example, in order to gain certain contracts, U.K. scampi companies would soak tail pieces in polyphosphate overnight to absorb liquid, then mould them into tail shapes, before freezing, adding excessive glaze and double breading.

Unfortunately competitive Vietnamese pangasius processors/exporters agree to demands for low prices and force the farmers to acquiesce. Twice a year pangasius farmers have to harvest their fish as the water temperature changes with the seasons, which causes them to lose condition. Furthermore, once they have reached their optimum weight of about 2.5 kilograms (kg), it takes an increasing amount of food to keep them alive.

The processors know this and take advantage of the situation to offer prices so low that farmers desperate to harvest their fish accept, but then often don’t re-stock their ponds. It is estimated that 70 percent of independent pangasius farmers have stopped production during the past two years.

The farmers need a factory delivery price of VND 22,000 (USD 1, EUR 0.78) to VND 30,000 (USD 1.40, EUR 1.06) per kg in order to continue rearing fish. With a filleting yield of 30 percent and processing and packaging costs this equates to USD 3.00 (EUR 2.24) to USD 3.50 (EUR 2.61) per kg, yet many importers are buying fish at less than USD 3.00 per kg.

It is easy to see, therefore, why the fillets are over-glazed and full of polyphosphates on the one hand and farmers screwed down on price on the other. There are instances of farmers being paid around VND 12,000 (USD 0.57, EUR 0.42) per kg for fish — less than half of what is necessary for them to survive.

And the farmers’ costs are rising. Not only has the price of feed rocketed by 30 percent or more during the past two years, but the feed manufacturers won’t provide credit and the banks are charging 15 percent to 30 percent interest on loans. The mostly government-owned hatcheries are also demanding cash up front for fingerlings.

Soon the only pangasius farms in Vietnam will be those owned by processing companies.

However, not all pangasius exports are polyphosphated and heavily glazed. There are white fillets — pangasius can also be sold as slightly pink or dark pink in some markets — which haven’t been treated with polyphosphate and have only a 5 percent glaze covering.

And there is no reason to doubt the intrinsic quality of the fish itself. Pangasius is no longer farmed directly in the Mekong River, which U.S. catfish farmers allege is full of Agent Orange that causes dioxin contamination — ironically it was used by U.S. forces during the Vietnam War — and where the fish feed on all kinds of waste material. The water in which the fish are reared is controlled and tested round the clock.

Inside the processing plants, pangasius is subjected to more quality checks than any other comparable species. Processors, who are approved by EU inspectors, routinely examine samples against 27 or more parameters.

In short, pangasius is one of the most, if not the most, monitored of farmed fish.

It is hard to understand why, despite all the checking and testing, pangasius now has little standing in the European market, particularly in the north. Indeed one leading Dutch distributor is now omitting the name of the fish from one of its value-added seafood products.

Whereas it previously labelled the product as “Panga” it is now just called “fish.” It’s almost as though the distributor is ashamed to be known for dealing with the species.

It has often been suggested that pangasius needs positive promotion by the Vietnamese. The evidence is piling up.

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