Last year, the country’s seafood industry failed to achieve the export target of USD 6.5 billion (EUR 5 billion), and this year too, the industry is preparing to face even tougher challenges with difficulties mounting up.
Despite a slump in demand from Vietnam’s traditional markets such as the EU, the U.S., and Japan, many seafood producers still received orders to deliver by end of first quarter of this year. Among these, Bianfishco signed 40 contracts to export seafood to the U.S. and is expected to bring in revenues up to USD 90 million (EUR 68.9 million).
However, not every seafood producer can confidently sign big contracts like Bianfishco. Avoiding big contracts and receiving smaller ones has become a reality in the country’s seafood industry as exporters worry they will not be able to fulfill the contract due to capital shortage.
Duong Ngoc Minh, chairman of Freshwater Fish Committee under the Vietnam Association of Seafood Exporters and Producers, shared that a shortage of capital and unstable input material are currently tricky problems for most enterprises in the seafood sector.
Receiving smaller export contracts is a solution to avert losses. According to a company in Can Tho City, in order to compete with rivals from Thailand, India, and Indonesia, Vietnamese seafood producers had to lower prices continually. With output price dropping while input overheads climbing, firms suffer bigger losses, Minh said.
It is expected that the cost for producing seafood will escalate by about 30 per cent. The association had asked the government for capital at favorable interest rates to help seafood producers, but until now it remains a matter of controversy.
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