Worsening COVID-19 outbreak impacting Vietnam’s seafood industry
The disruption to Vietnam’s seafood sector caused by an ongoing outbreak of COVID-19 continues to worsen, resulting in a growing impact on its import and export activities and a reduction in its processing capacity.
Vietnam is confronting its worst outbreak of COVID-19, with more than 171,000 residents having contracted the virus since 27 April, with most cases in the country’s south. In comparison, between early 2020 and April 2021, Vietnam experienced fewer than 3,000 cases, according to government data.
Since the middle of July, Vietnam’s government has instituted lockdowns in dozens of provinces and municipalities, and on 31 July, Prime Minister Pham Minh Chinh extended a federally mandated lockdowns in 19 provinces and cities, including Ho Chi Minh City – Vietnam’s main gateway for seafood exports – and the Mekong Delta, the country’s primary region for seafood production, by another two weeks through mid-August.
During the lockdowns, factories and farms are still allowed to operate, but their workers must work, eat, and sleep within the plants and farms and completely isolate from the public and their families. However, only about 30 percent of seafood companies in Vietnam’s south have been able to meet the requirements continue operations, the Vietnam Association of Seafood Exporters and Producers (VASEP) said in a statement on 2 August. And for the processing plants that have remained open, their capacity has been reduced by around half, as they can only house between 30 and 50 percent of workers at their factories, VASEP said.
The harsh measures have taken a toll, with VASEP now projecting Vietnam’s seafood export value to decrease by about 4 percent year-on-year to USD 763 million (EUR 641.7 million) in July, the first month to experience a year-on-year decline since February 2021. The country’s exports rose 16 percent by value in the first half of July, but fell as much as 20 percent in the second half of the month compared to the first half of July. Of the total, the export value of shrimp dropped by about 4 percent year-on-year to USD 374 million (EUR 314.6 million) in the month, followed by pangasius at USD 117 million (EUR 98.4 million), down 5 percent; tuna at USD 60.5 million (EUR 50.9 million), 5 percent lower year-on-year; and squid and octopus at USD 47 million (EUR 39.5 million), sliding 9 percent from a year earlier.
The export value of crab and other fish species exports also contracted by between 2 and 3 percent, according to VASEP. Without measures to support production and export capacity, the country’s export activities are likely to slow down further in the remaining months of this year, VASEP said.
For the seafood industry, the outbreak’s impact has been felt most harshly in the southern province of Tien Giang. At least 180 workers at a pangasius facility operated by Godaco Seafood in the province have tested positive for the coronavirus. The factory has been shut down and sickened workers have been sent to a local hospital for treatment, the Voice of Vietnam reported.
Godaco, which was the fifth-largest pangasius exporter in Vietnam in 2019, had already reduced its workforce at the factory by a half to 550 workers as of 15 July to align itself with health decrees issued by the provincial government, Godaco General Manager Nguyen Van Dao said.
Infections were also detected at the Quang Thuong Viet Nam steel plant in Tien Giang, with at least 127 confirmed cases as of 30 July. The clusters at Godaco and Quang Thuong Viet Nam have forced the provincial government to order all businesses in the province to completely suspend operations from 5 August.
But Vietnam’s leading pangasius producer, Vinh Hoan, is asking the government to reconsider its decision, as it will affect production at Van Duc Tien Giang facility, which is partly owned by the company, according to a letter sent by the Vinh Hoan to Vietnamese Agriculture Minister Le Minh Hoan on 29 July. The company, which was already operating at 50 percent of capacity during the pandemic, is strictly following federal safety guidelines and has not had a single coronavirus case at the plant, even after testing all 1,200 workers at the facility on 27 July, the company wrote, asking for an exception to the decision or a full reversal. It expressed concern over not being able to meet the terms of signed contracts and the terms of its operating loan, and its knock-on effects of the closure on its supply chain and material pangasius sales. The decision could cost the company market share, Vinh Hoan said in the letter.
Vinh Hoan asked the Agriculture Ministry to consult with Tien Giang’s authorities to ask for permission to continue operations at its Van Duc Tien Giang facility. It argued the suspension order should only be applied at facilities where workers have contracted COVID-19, Vinh Hoan said in the letter.
According to local newspaper Tuoi Tre Online, in a virtual meeting on 31 July, Tien Giang Agriculture Department Deputy Director Tran Hoang Nhat Nam said the province’s leaders have agreed to consider exceptions to the lockdown to allow facilities in accordance with local health regulations to continue operating,
Meanwhile, Cat Lai, the largest port for seafood export and import in Vietnam, has stopped receiving refrigerated cargoes until 16 August due to a growing pile-up of containers at the port. The port will also stop taking oversized and overweight containers beginning 5 August. The build-up of containers at the port has worsened in recent weeks due the mass suspension of business operations during the lockdowns, according to the port operator, Saigon New Port Corporation.
Photo courtesy of Godaco Seafood