Vietnamese Banks Bail Out Pangasius Farmers
In response to a government directive, Vietnamese banks have agreed to lend VND1.139 trillion ($69 million) to the country's processors to purchase from farmers all remaining pangasius weighing more than 1 kilogram, Agriculture and Rural Development Minister Luong Le Phuong told Asia Pulse today.
The processors plan to buy the remaining basa and tra surplus by month's end, processes it and export it.
By July 20, the pangasius surplus had dropped to 120,000 metric tons from 170,000 metric tons, said Phuong. It fell to 90,000 metric tons by mid-August, and all of it was expected to be sold by month's end.
This year's overstock has driven pangasius prices down to dangerous lows. The purchasing price was VND13,000 to 14,000 (79 to 85 cents) per kilogram, lower than the production cost of VND15,000 to 16,000 per kilogram.
The fear now is that with little profit to be had, farmers will be reluctant to farm pangasius, endangering next year's crop.