With the global COVID-19 pandemic stalling exports of seafood products from Vietnam to China and other major markets, the country’s exporters are seeking help from the banking sector.
Processors and exporters are facing numerous challenges, including a lack of workers, disruptions in their supply chains, and delays in export activities, Vietnam Association of Seafood Exporters and Producers (VASEP) said in a statement Monday, 16 March.
Stockpiles at many exporters’ factories have been growing, while delays in cargo delivery have worsened in recent weeks. Shipments to Vietnam’s major markets in Asia, including China, Japan, and South Korea have slowed, with some buyers in South Korea even cancelling new orders, VASEP said, referring to a survey conducted to evaluate the impacts of the epidemic on its members.
“Slow payments from buyers have affected the capital turnover and weakened the companies’ ability to pay debts which are due during March [to] May,” VASEP said. The outbreak has resulted in a mounting financial burden for Vietnamese seafood business, it said.
The survey was completed after Vietnam’s central government on 4 March directed the State Bank of Vietnam to provide a credit package of VND 250 trillion (USD 10.7 billion, EUR 9.7 billion) and another fee and tax exemption and reduction scheme worth VND 30 trillion (USD 1.3 billion, EUR 1.12 billion) to support businesses affected by COVID-19. The following day, Agriculture Minister Nguyen Xuan Cuong asked VASEP to submit a proposal for financially supporting seafood producers and exporters.
The VASEP survey showed that most companies wanted to be provided loans with interest rate of between 3 to 6.5 percent for the Vietnamese currency, the dong, down from the current rates of between 8.5 to 10.5 percent; and 1.5 to 2.8 percent for U.S. dollar, down from 4 to 4.5 percent rates. The industry also asked to banks loosen loan requirements so more companies can qualify for the loans they need.
The industry further requested an extension for their current debt payments and called for banks to lower transfer and transaction fees, which they said are still high.
And it asked for the government to reduce taxes and fees imposed on the seafood companies this year, VASEP said.
Photo courtesy of Aleksandar Todorovic/Shutterstock
