Serious shortage of raw materials for seafood processing

Empty processing factory in Vietnam

Empty harvesting basket in Pangasius farm

Most of the seafood processing enterprises in Phu Yen, a southern province in Vietnam, are lacking of raw materials due to a lean harvest and low marine capture. Since the early this year, local processors have to buy raw materials from many other regions.

Currently, Phu Yen has a fish farming area of about 2,000 hectares in which white shrimp farming area accounts for nearly 1,200 hectares. So far this year, due to unfavorable weather, water resources and environmental pollution, hectares of shrimp have died, leading farmers face heavy loss. This situation makes raw material for local procesing plants in the province become scarce.

Nguyen Hung Co., Ltd (Song Cau town) specializing in processing seafood such as hairtail, goby, swimming crab, tuna and so on is very difficult in raw material purchasing. From the beginning of this year, Phu Yen seafood Co., Ltd can not find enough raw materials for processing. In this situation, local seafood processing enterprises are forced to use other alternative fish sources to keep operation. “ Phu Yen Seafood Co., Ltd is processing tuna and hairtail instead of traditional fish such as shrimp or swimming crab. To some contracts, the company negotiate with partners to extend time of delivery to collect enough raw materials” Mr. Le Van Hong, Chairman as well as Director of Phu Yen Seafood Co., Ltd said.

In effort to finish signed contracts, many seafood companies have to buy raw materials in other provinces such as Binh Dinh, Binh Thuan, Ba Ria – Vung Tau, Ca Mau, and Kien Giang. The increasing freight charge caused the raw material price to rise by at least 20 percent while exported seafood price only rises slightly. Moreover, offshore fishing boats sell fish to traders at sea, not for landing to reduce additional costs.

Mr. Nguyen Hung Hoa, Director of Nguyen Hung Co., Ltd expressed that, since the company expanded production facilities, consuming 1,000 MT of raw materials per year, the company faces difficulties in the current situation. Now raw material resources only meet one third of its capacity. Recently, the company signed a contract exporting 50 MT of finished products (in need of 100 MT of raw materials), however, limited raw matertial supply is still a major concern of the company.

Source: VASEP

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