Vietnam: Seafood export targets by 2020

As the year 2010 is over, the Seafood Export Development Program in the period 2005- 2010 approved under the decision No.242/2006/QD-TTg dated October, 2006 has accomplished its final steps. It is time to go behind what has been achieved and what has not so as to set targets for the next 5 and 10 years.

Great achievements.

First of all, it is undeniable that the fisheries sector in the past years has still maintained its inherent growth, playing a leading role in the industrialization and modernization of the agriculture and rural areas, as well as drastically transforming itself into a major producing industry in the country’s economy in general.

Seafood has been continually one of the key export industries in Viet Nam. Shrimp and Pangasius are among the rare products of the country with the annual export value of over US$1 billion. Remarkably, the export value of shrimps has already surpassed US$2 billion per year. A great number of Viet Nam’s seafood products are highly competitive, and occupying solid, even overwhelming positions – for the case of Pangasius – in the international market.

The fisheries sector in general, seafood exports in particular, has actually integrated into the global, considering its progress in management improvement, technological and scientific advances, and immune to trade barriers and legislative fights in the business world. That Viet Nam has continually consolidated its position in the world’s Top-10 seafood exporting countries since 2002 serves as a solid ground for its increasing achievements in the upcoming years.

Looking at the figures it can be said that many basic quantitative targets for seafood exports have been appropriately set and successfully implemented and that the outcome has even exceeded the planned target. The quantity of seafood export in 2010 came up to 1.353 million tons, far exceeding the target of 900,000 tons set in the Seafood Export Development Program for the period of 2005- 2010. Export value hit over US$5 billions, considerably higher than the target of US$4.0- 4.5 billion.

However, the biggest pride is the fact that Viet Nam has laid a milestone in the modern world’s fishery history. If 20 or 30 years ago, the Norwegians once made the whole world admire their raised salmon, and the Thai people heightened their position in the world market with their farmed prawns, Vietnamese people now have the right to be absolutely proud of their Pangasius.

Furthermore, before gaining worldwide recognition 20 to 30 years ago, salmon or prawns had originally been products of high value and popularity. On the contrary, Pangasius had been just an ordinary kind of fish flourishing in Mekong delta. Now its name has existed in most languages in the world. It was mentioned even at the forums of the US Congress and European Parliament, though the comments were not always a praise. Yet, such a number of compliments and criticism only contribute to justify its critical significance. Obviously, this important position held by Pangasius is not owing to a kind of magic like the Cinderella becoming a princess overnight.

It is the very outcome of Vietnamese farmers and enterprises’ continuous efforts andcreativeness.It is with Pangasius that Vietnamese enterprises have come up with a new approach in its marketing philosophy, which is ‘making people need what we produce’ rather than ‘selling what they need’. According to FAO, each person on the earth consumes annually 20 kilos of seafood (live weight) on average. It means that Viet Nam’s output of 1.5 million tons of Pangasius is sufficient for 75 millions people. However, apart from Pangasius, people also consume fish, scallops, shrimps, and crabs, etc. It is more reasonable to assume that each person consumes 1 kilo of Pangasius, then a quarter of the world population has enjoyed this fish!

The above achievements are persuasive bases for the fisheries sector in general and seafoodexport industry in particular tostrive for higher targets in theperiod 2015-2020. It hasseemingly explained for the littlesuspicion of the quantitative targetsset in the Program, particularlyexport value of US$6.5-7.0billions by 2015 or US$8-9 billionsby 2020. The above figures seemto have satisfied all stakeholdersincluding the Government,enterprises, and fishers. Theanalyzed potentials of the industryand market opportunities are all insupport of such targets. However,there are still problems concerningthe feasibility of such targetsneeded to be discussed.

Identify limitations

The most worrying factors donot include how many billionsUSD worth of export, what kindsof aquatic products to export:shrimps, Pangasius or seabass, orwhich market to boost tradepromoting: Japan, America,Europe, Middle East or China? The questions are rather how to achieve such targets or what proportion can be pocked from such billions of US dollars. It is not  easy to find perfect answers to those questions. It is advised that the factors hindering the realization of the targets set in the strategies, programs, and projects be considered first.

A great deal of drawbacks can easily be found in Viet Nam’s fisheries and aquaculture in general and seafood export in particular. Subjective causes include the raw material supply-demand imbalance, the fluctuating prices, unfair competition, government’s poor investment, and issues related to feed, juveniles, irrigation, administrative procedures, etc. Objective causes are anti-dumping duties, or smear campaigns by rivals. Even a reputed NGO organization like WWF has recently fired a shot at Viet Nam’s Pangasius by putting the fish in the list of seafood that people are advised not to consume.

Some drawbacks and weaknesses have only been revealed in the development process and have become increasingly worse due to lack of precautionary measures. The state administration system is mainly behind these drawbacks. “Most of what supposed to be within the responsibilities of enterprises and producers have been done but those belonging to the government remain untouched,” said Dr. Nguyen Thi Hong Minh, former Vice Minister of Fisheries, at the conference on the Seafood Export Development Program by 2015, vision towards 2020.

That may be an overstatement, though not totally ungrounded. However, it does not seem to be the core of the problem. It is the incompetence manifested in the issuance and amendment of the recent legislative documents that has revealed the administration system’s weaknesses. Such system, which was crippled by constant changes in the organization and personnel in the past few years, was unable to catch up with the rapid growth of the sector. However, despite those weaknesses and all the confronting problems like natural calamities, economic recession and trade barriers, the fisheries industry has experienced a strong growth in both production and export value.

At the 100 Pangasius producers conference calling for contributions to the draft of the government’ s Decree on the Pangasius Production and Consumption Management, VASEP Fresh-Water Fish Committee (VFFC) Chairman Duong Ngoc Minh reemphasized that this is the best time to reorganize the Pangasius production and bring it closer to the real value – the time when the consumption of Pangasius is at its peak but all the fish in the farming ponds, in processors’ and retailers’ stores are almost running out. It signifies that supply is currently below demand. As a result, the prices of raw Pangasius and shrimps both have grown up recently, which made producers ‘dizzy’ but happier smiles are still on their faces and fish farmers.

Growth in value.

The underlying target is not raising the export value by increasing the quantity of products at the same rate (or even faster) that is selling one fish for one VND, and two for one more. It is highly possible to get only three dongs once four fish on sale. This, in fact, has happened. The key idea of the next development period should be selling three fish for four or even five VNDs. This thought has been adopted by many enterprises that have focused on renovating technology, increasing the proportion of products with added value to lessen the raw material input on top of investing in brain power to obtain higher values and profits. It is also the long-term solution to cope with the declining advantages of cheap labour.

It is necessary to assert that though Viet Nam may become an industrial country by 2020, fisheries will still be one of the key economic sector of the country. Furthermore, if Viet Nam takes full advantage of its strength, this industry will keep its important role many years later. That the value and profit rate always increases and increases faster than the production signals the development.

To attain this, it is important that the material-processing correlation be addressed first. When possible, enterprises must actively take the decisive role in the production chain. They should secure material supply or at least keep control of the chain from the beginning to the final stage so as to eliminate negative effects caused by intermediary agents. To do so, they can start with establishing production coalitions or rather the vertical relationships/ownership sharing in the community. In other cases, the buying and selling of materials will only be carried out within the auction centers under the control of the community.

Only in this way is it possible to regulate the supply and demand and implement comprehensive programs for quality control such as banning the use of toxic chemicals and antibiotics, conducting traceability, applying GlobalG.A.P for all the farming areas, etc. while getting rid of such ‘headache’ as IUU, trifluralin residue, and impurities injection. The community’s strength and the coalitions’ financial resources are prerequisites in preventing illegal trade and unfair competition in thecountry.

At present, with the aim to protect consumers’ benefits, importers frequently require that products be certified by new and increasingly challenging standards. Behind the certification bodies are always groups of importers.

With the big production coalitions, Viet Nam’s producers and exporters have chances to satisfy the most stringent requirements of the market, raise more powerful voice in negotiation with such importer groups, or in legal disputes.

In that picture, it is advised that the government’ s apparatus improves its own capacity to focus on macroeconomic development strategies and planning, basic infrastructure programs, and strengthened legal and institutional system. All are in support of the production coalitions and social human resources; enable them to meet the economic development demand of the industry.

With this perspective, in the next coming years, millions of tons or billions US dollars will not be the target of the fisheries sector in general and of seafood export in particular. They are just the floating part of an iceberg – an industry which develops in a sustainable manner no matter what challenges it may face.

Source: Vietfish

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