The Vietnam Association of Seafood Exporters and Processors says the economic crisis in Europe has been a big contributor to the decline in exports and record cod supply last year exacerbated problems.
While Vietnamese government officials had forecast a stronger financial performance from the Southeast Asian country’s pangasius industry 12 months ago, it is credit to the enterprises involved that exports for 2012 managed to achieve a value of USD 1.8 billion (EUR 1.4 billion), which is on par with the sector’s performance in 2011.
Market observers will recall that at the start of 2012 authorities said they expected Vietnamese pangasius exports to earn more than USD 2 billion (EUR 1.5 billion) and that the total output would be between 1.2 million and 1.5 million metric tons (MT).
Last year’s production actually turned out to be just a little shy of the record 1.2 million MT achieved in 2009, which is still quite an achievement bearing in mind that in the last 18 months pangasius producers contended with floods, shortages of good quality but affordable juvenile fish, high feed prices, low farm gate prices and unaffordable bank loan rates. Exporters, meanwhile, have been struggling to secure sufficient supplies of good quality products and have also seen buyer demand tumble in some major markets.
Europe remains the largest market for Vietnamese pangasius, taking around 30 percent of the country’s total exports. However, the United Nations Food and Agriculture Organization (FAO) confirmed that exports to the EU in the first half of 2012 declined by 11 percent, with earnings decreases in important pangasius countries like Spain and the Netherlands (both down 35 percent), and Germany (down 45 percent). According to exporters, the trend continued through the second six months of the year.
The Vietnam Association of Seafood Exporters and Processors says the economic crisis in Europe has been a big contributor to this decline, while European sources say the scarcity of fillets sized between 120-170 grams and 170-220 grams, which consumers prefer, is the more likely reason given the affordability of the product.
Another thorn in the side of the Vietnamese is the growing supply of Atlantic cod (Gadus morhua). Record volumes of Europe’s favorite whitefish will be made available to the market this year.
On the basis of scientific advice, Iceland’s total allowable catch (TAC) for the 2012/2013 season was raised 22.5 percent to 196,000 MT, while the 2013 TAC in the Barents Sea fishery, shared by Norway and Russia, is 1 million MT, a year-on-year increase of 33 percent. Cod is expected to become much more competitively priced in Europe this year as a result.
Prices have already embarked upon a steady downward trajectory. For example, the average export price of fresh Norwegian cod to the important U.K. market in the first 11 months of 2012 was NOK 20.01 (EUR 2.73/USD 3.62) per kilogram, compared with NOK 21.48 (EUR 2.93/USD 3.89) in the corresponding period of 2011.
Pangasius exporters will be further disheartened to learn the TACs for both Iceland and the Barents Sea are expected to be raised even higher over the next few years.
The United States may soon leapfrog the EU to become the No. 1 market for Vietnamese pangasius. The States currently accounts for around 22 percent of Vietnam’s total pangasius exports.
