Coming into 2012, Vietnam’s pangasius industry, which struggled to meet market demand throughout much of last year, continued to be undermined by the floods that in September washed away many farming operations in the Mekong Delta.
The country’s two largest production areas — the An Giang and Dong Thap provinces — were the most affected by the floods. An Giang’s total loss has been estimated at VND 11.7 billion (EUR 436,100, USD 556,450), while Dong Thap’s losses were VND 40 billion (EUR 1.5 million, USD 1.9 million).
As a result of the floods and farmers looking to restock their grow-out ponds, the price of fingerlings toward the end of 2011 took a large upswing and there was still a shortage of good quality, affordable juveniles coming into the new year. At the same time, there were reports of processors being forced to turn away business because their state-of-the-art plants couldn’t source enough fish to fulfill orders.
At the start of January, the farm gate price for pangasius had climbed to a very high VND 29,000 (EUR 1.08, USD 1.38) per kilogram. Processors have predicted the price will exceed VND 30,000 (EUR 1.12, USD 1.43) per kilogram in line with the ongoing supply shortage.
Vietnam produced a record 1.2 million metric tons of pangasius in 2009 and 1.1 million metric tons in 2010. While official figures for 2011 are yet to be published, the harvest is thought to have been between 700,000 and 800,000 metric tons.
In value terms, the Vietnam Association of Seafood Exporters and Processors (VASEP) still expected the 2011 export earnings of Vietnamese pangasius to reach USD 1.6 billion (EUR 1.3 billion). VASEP said pangasius exporters had maintained a 29.2 percent value growth rate throughout the first 10 months of last year, earning USD 1.5 billion (EUR 1.2 billion). There should be no doubt, however, that the strong earnings come as a direct result of the industry’s supply problems and their effect on prices.
Europe is the largest market for Vietnamese pangasius, taking around 30 percent of the country’s total exports, with Spain, the Netherlands and Germany accounting for half of the bloc’s pangasius imports. However, exports to Europe have been in decline in recent months due to a scarcity of fillets sized between 120 to 170 grams and 170 to 220 grams, which are the market’s preference. In addition, VASEP confirmed that the economic crisis in Europe has been affecting payments to Vietnamese exporters and further orders have declined.
The weakened state of key end-markets will be of considerable concern for Vietnamese exporters. But putting the Eurozone crisis to one side, another significant hurdle to getting Vietnamese production back on track is the number of farmers that aren’t restocking at the level needed by processors/exporters.
These farmers have become increasingly concerned by the lack of good quality, affordable fingerlings, high feed prices and unaffordable bank loan rates. Looking forward, much hinges on their determination to stay in the industry, and it should be noted that many did quit pangasius production last year.
Despite the raft of problems facing the industry, VASEP has projected the country’s pangasius output will return to the heights of three years ago and more than 1.2 million metric tons will be harvested in 2012.
