Chinese buyers are paying “very low prices” for Vietnamese pangasius because they’re aware of large stockpiled volumes, Vietnam Pangasius Association Duong Chairman Quoc Nghia told Vietnambiz on 10 January.
Vietnam’s pangasius exports faced a difficult year in 2019, as sales declined 11.7 percent to nearly USD 2 billion (EUR 1.8 billion), amid high production and low prices. The country produced an estimated 1.52 million metric tons (MT) of pangasius in 2019, up 6.9 percent from 2018.
As shipments to the United States have plunged, China has emerged as the biggest consumer of pangasius from Vietnam, accounting for 32 percent of Vietnam’s gross export value for pangasius, much higher than the 14 percent of the U.S.
Between January and November, Vietnam exported pangasius worth USD 618.5 million (EUR 556.7 million) to China, up 28 percent from the same period in 2018.
Export prices to China, however, were very low compared to other markets, Nghia said.
Vietnamese pangasius companies do not how much pangasius remains stockpiled domestically and abroad. But average material prices in Mekong Delta have remained low at around VND 19,000 (USD 0.82, EUR 0.73) per kilogram, even below the cost of production, and Chinese buyers know “like the back of their hand” that supply is abundant at Vietnamese companies’ storage systems, Nghia said.
“They [Chinese buyers] are smart enough not to buy at high prices,” he said.
Nghia urged local exporters to unite and refrain from selling at even lower prices to keep the rate from falling further.
Nghia forecasted that China will remain the most important market for pangasius exporters from Vietnam this year owing to its huge demand. But Vietnamese exporters will have to deal with more competition in China, especially as Chinese producers have signaled an ambition to increase their pangasius production. China has also tightened rules for imported seafood, which will create more obstacles for exporters wishing to ship more volumes to the market.
The chairman said he expects exports to China and the U.S. to rise but “not [at] a big rate” in the first quarter of this year.
Amid a fragile export market, Nghia called on pangasius producers to pay more attention to domestic market. With a population of around 100 million people, Vietnam could eat as much as 200,000 MT of pangasius annually if per-capita consumption levels rose to two kilogram per year, he said, adding that the domestic market has largely been ignored by pangasius producers due to higher profitability rates in export markets.
Photo courtesy of VASEP
