Vietnamese pangasius production unlikely to fulfill potential

Published on
January 6, 2014

Given the well publicized problems in the industry such as the high costs of loans to purchase feed and fry, the news that Vietnam’s pangasius production last year fell by 7.6 percent to 1.15 million metric tons (MT), compared to 2012, comes as no surprise. What may be a surprise, given the price cutting by producers that takes place, is that the export value in 2013 reached USD 1.8 billion (EUR 1.3 billion), which was similar to the year before.

These figures were presented by the Ministry of Agriculture and Rural Development (MARD) at a conference in Hanoi on 24 December 2013.

According to a representative of the Vietnam Association of Seafood Exporters and Producers (VASEP), the value of pangasius exports this year is expected to fall by 5 percent, to USD 1.7 billion (EUR 1.24 billion). This will be due to a lack of raw materials, difficulty in obtaining loans for investments and losses by farmers, he said.

Nguyen Huy Dien, deputy head of MARD’s Fisheries Department, told the meeting that the industry would restructure production and exports of pangasius to continue developing the pangasius industry this year and in the future. Dien gave no details of how this would be achieved and it all sounds like a typical politician’s speech, short of actual facts.

There was a proposal to increase domestic consumption by 100 percent in 2015 and by 300 percent by 2020. However, again there were no details of how this was to be achieved and what tonnages would be involved. There was also no detail on how the export value of pangasius would reach USD 2.2 billion (EUR 1.6 billion) in 2015 and USD 3 billion (EUR 2.2 billion) in 2020, which Dien predicted.

Vietnam’s pangsius industry is on a seemingly endless downward spiral. According to informed sources there is the potential to double pangasius production in Vietnam to 2 million MT if only authorities such as MARD and VASEP would get a grip on the situation.

Throughout last year SeafoodSource published various opinions on how Vietnam might get its act together with regard to pangasius production. These ranged from improving the image that the international trade has of the fish, to increasing the price at which it is sold. However, all these opinions originated from sources outside of Vietnam.

So what do the Vietnamese themselves intend to do to boost production and sales of pangasius? Perhaps the most radical proposal was made by VASEP in July 2013 when, in conjunction with the Belgian government, it put forward what was called a pilot mechanism for exporting pangasius products to the EU.

A distribution center would be established in the port of Bruges (Zeebrugge) in Belgium to distribute the products to 28 EU markets. VASEP would take care of transport, logistics, auctions on the electronic trading floor, distribution and payment. There would be a mixture of funding for the operation with finance being provided by the Vietnamese and Belgian governments, and also the EU.

Once the center was set up, it would help exporters reduce their shipping costs by combining the volume of their exported products, according to a Vietnamese news report. “It will also provide them with an opportunity to sell directly to the retailers and supermarket chains in Europe rather than going through a middleman,” said a spokesman.

“Additionally selling seafood in Europe through one common channel means that the quality and price of the fish will be more uniform, more transparent and more controllable, thus eliminating unhealthy competition.”

The trade promotion department of the Ministry of Industry and Trade in Vietnam was supposed to liaise with the Belgian embassy in Hanoi to organize a seminar to introduce the project and appoint a group of experts to manage it.

There is no information on the outcome of this seminar or, indeed, whether it even took place. However, one can imagine the reaction of pangasius producers and exporters to the removal of competition however “unhealthy.”

So, with no firm leadership, the industry continues to limp along and the enormous potential of rearing and exporting a very reasonably priced “white” fish species will go unfulfilled. This will be to the detriment of the Vietnamese and consumers around the world.  

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