Lack of material creates problems for seafood businesses

Shortage of raw materials in Vietnam

Empty harvesting basket in Pangasius farm

Local seafood businesses anticipate that they will continue to encounter difficulties in the second quarter of the year because of the rise in interest rates and the shortage of production materials.

Chu Van An, deputy director general of Minh Phu Seafood Joint Stock Corporation said that  although several seafood companies have received a plenty of orders, they encountered difficulties due to 22-24 percent interest rates, shortages of materials and recent epidemics that affected shrimp in many provinces.

When assessing the second quarter of the year, Mr An said that purchasing power in the Japanese market remains strong after the nuclear power plant catastrophe. The price of shrimp increased slightly in the market against the previous period and the purchasing power in the US and European nations is also robust.

In the first four months of the year, seafood exports reached US$1.6 million, up 27.8 percent in value. However, businesses are very concerned about the lack of materials to process seafood for export.

Nguyen Van Ky, director general of the Agifish Company said that tra fish businesses make a profit in the first quarter of the year because of the large volume of goods in store since late last year. From the beginning of 2011, the price of raw tra fish increased by 25 percent and hovered at a record high of VND29,000 per kilo. Although tra fish have been offered at US$3.5 per kilo recently, the price has not matched the nearly 100 percent rise in the price of materials in mid -2010.

Almost all fishermen said that the seafood harvest will be lost this year due to weather conditions and the rising price of oil. This has caused fishermen to stop fishing offshore, which has led to a serious shortage of seafood.

The price of tiger prawns and white-leg shrimp has increased sharply and seafood processing businesses encountered a lot of difficulties purchasing materials for export.

Another reason for the serious shortage of materials is that there has not been a peak harvest season in ponds raising tiger prawns in the Mekong River Delta as epidemics affecting shrimp in the region tend to spread widely.

According to seafood experts, there are other hidden technical and quality factors in the aquaculture sector. Businesses have affirmed that they are willing to purchase seafood products from farmers at a high price to serve production but this has proved ineffective. Farmers are turning to other kinds of seafood breeding which is problematic for businesses. The escalating prices of breeding stock and production costs have also caused trouble for both seafood producers and businesses.

To cope with the lack and poor quality of seafood, Hung Vuong Joint Stock Company had to provide VND4 billion to allocate feed for tra fish farms.

Source: VOV news


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