Vietnamese pangasius exports to continue to plunge

Published on
January 11, 2016

The value of Vietnam’s pangasius exports will continue to fall in 2016, according to the Vietnam Association of Seafood Exporters and Producers (VASEP) as reported in the Vietnam News Daily. Exports are predicted to earn USD 1.5 billion (EUR 1.4 billion) this year, a drop of 5 percent compared with 2015.

The reasons for the expected fall include: the anti-dumping tariffs imposed in the USA; the US catfish monitoring program – pangasius is a catfish species; and competition from other whitefish species. (Although a freshwater fish, pangasius competes in the market for marine white fish species.)

To recover from this decline, the domestic pangasius industry should seek to sell in more export markets and increase its share in existing export markets, the association said.

The value of pangasius export sales had already fallen in 2015. According to official figures, the total value of pangasius exports last year was USD 1.6 billion (EUR 1.5 billion), 10 percent lower than in 2014.

Six out of the eight largest export markets for Vietnamese pangasius saw reductions in the value of sales in 2015 compared with 2014.
In Europe, the biggest market, the value fell by 14.3 percent, in the USA, the second biggest market, it fell by 5.6 percent, in the ASEAN group of countries by 4.3 percent, in Brazil by 39.8 percent, in Columbia by 13.9 percent and in Mexico by 13.2 percent.

However, the value of pangasius exports to the UK in 2015 rose by 17 percent, to mainland China and Hong Kong by 42 percent and to Saudi Arabia by 2.4 percent.

In most major markets, exports of Vietnamese pangasius products faced many challenges, VASEP said. These included lower demand caused largely by the added water scandal – one discount supermarket chain in continental Europe destroyed pangasius products worth EUR 400,000 (USD 435,400) because they were found to contain 30 percent water – no increase in selling prices and increasingly strict standards on quality, food hygiene and safety.

Of particular concern has been the recent publication of the preliminary results of the USA’s anti-dumping duty administrative review (POR-11) on Vietnamese pangasius fillets. This has caused an immense impact on exports, according to VASEP.

Its chairman, Ngo Van Ich, said the two mandatory reviewed exporters – Hung Vuong and Thuan An – will have to pay tariffs of 3.6 US cents (3.3 Euro cents) per kilo and 8.4 US cents (7.3 Euro cents) per kilo, respectively, while 16 other exporters will be taxed US 6 cents (5.5 Euro cents) per kilo.

At the tax rate of 6 US cents, most companies will be unable to export to the USA, he said.

Also the new US inspection rules for pangasius suppliers pose great challenges to Vietnamese exporters, he added. From September 2017, all countries will have to submit lists of establishments that currently export catfish to the USA, as well as documents proving that their products adhere to regulations set by the US Department of Agriculture’s Food Safety and Inspection Service.

If the procedures are not followed, then companies will be barred from exporting products to the USA.

Duong Ngoc Minh, VASEP deputy chairman and Hung Vuong Group's CEO, said that this year local seafood companies should pay less attention to the US market and should, instead, focus on Asian markets which, including China and the 10 ASEAN nations, have a total population of 3 billion people.

To have stable and sustainable development of pangasius for the future, the Ministry of Agriculture and Rural Development (MARD) should soon issue Decree 36 to ensure the quality of pangasius products, Minh added.

Decree 36 will restrict glazing on frozen pangasius fillets to no more than 10 percent and humidity to 83 percent of the product weight. It was due to come into force at the beginning of this year but pangasius exporters had objected saying it would cost them business as they would not be able to keep prices as low as importers demanded.

Following a petition to the government the introduction of the regulation was postponed for a year.

Minh also said that the Vietnamese government, MARD and the Ministry of Industry and Trade should start advertising pangasius products domestically and in foreign markets to promote consumption.

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