HungCa Managing Director Tran Van Hau: Farmers should watch out the price manipulation

It is true tha Viet Nam is the only country in the world breeding Pangasius successfully. However, it is also true that fish price goes up and down like a yoyo and sometimes it strikes deadly blow to farmers, processors and exporters.

Since late 2010, there has been a persistent shortage of raw Pangasius and many processing plants had to operate below their designed capacity. The lack of juveniles, soaring feed price, volatile interest rate, and difficult access to bank credit further aggravates the picture, which makes farmers more cautious than ever about making more investment in the fish farming. Such situation would surely lead everyone to believe that Pangasius price will continue to rise. However, since early May, the fish price has drop from the record VND2,900/kg to VND26,500 – 27,000/kg in only a few days. To shed a light on the matter, Vietfish International (VF) has conducted an in-dept interview with Mr. Tran Van Hau, Managing Director of HungCa Company in Dong Thap, one of the leading Pangasius processors in Viet Nam.

VF: When the fish price peaked VND29,000/kg, some farmers predicted that it would continue to increase and held their stock. However, the trend actually reversed. So according to you, what are the reasons behind the price decrease? Is it because the Pangasius market has been oversupplied?

Mr. Tran Van Hau: It is certainly not because the falling demand in EU or the US. On the contrary, market consumption will continue to rise because the world is crying for more food, particularly the affordable, delicious and convenient whitemeat product like Pangasius. As a result, I think that the Pangasius industry in Viet Nam has a great opportunity to expand if all stakeholders move in a sustainable way like what HungCa is doing.

I think there are several reasons behind the recently volatility of Pangasius price. For example, our export price increased so fast that the buyers and consumers needed time to adjust to the situation. The fluctuating exchange rate as well as the mass harvest of several processors at their own ponds may also make the price temporarily decline. Some small-scale farmers, who hold their stock waiting for the price to going up, may be discouraged by this decline and decide to sell out their fish, thereby making the price truly fall. If the “crowd psychology” works, the situation may become even worse and it is the farmers who suffer losses first.

VF: What do you think will be the next trend? Will the price further fall?

Mr. Tran Van Hau: The price trend will largely depend on the attitude of farmers themselves. I think the current raw material supply is neither short nor abundant but just enough for processing demand. Besides, buyers have given positive feedback. So if the processors and farmers adopt the right attitude and are supported by the government’s policies, i.e. reduced interest rate, the fish price will soon bounce back.

VF: Some people have raised suspicion that the price fall was manipulated by some mischievous enterprises?

Mr. Tran Van Hau: It is always like that. Whenever the water is troubled, there will be people who try to fish in. The fish farmers should therefore be careful not to fall into the trap set by speculators. Clearly, the spiraling fish price does not reflect the true situation since the fish farming input costs are still rocketing. So it is just a momentary development.

Therefore, I would like to stress that the fish farmers should be very prudent in this case. They should make informative decision instead of engaging in herd selling or buying and giving processors a chance to maneuver the price.

VF: It is said that HungCa has a huge farming area and is one of the first enterprise certified GlobalG.A.P. It can self-supply most of the raw material required for processing, so did the recent price developments affect the company’s performance?

Mr. Tran Van Hau: When the market changes unpredictably, no enterprise is left unhurt. However, it is fortunate that fluctuation does little harm to HungCa because since its establishment, the company have made sustainable development its central principle.

I believe that if all stakeholders in the value chain, i.e. farmers, processors, juvenile/feed producers etc. should have access to sufficient and transparent information, others will not be able to pull a fast on them and the industry will develop in more sustainable manner. Efforts should be made to stabilize both the farm-gate and export price so that farmers and other stakeholders will not be hurt.

As I have said, we always want the farmers to make profit and we believe it is our responsibility and privilege to bring such profit to farmers. HungCa will not be able to thrive unless the industry develops and every stakeholders benefit from such development.

Source: Vietfish International

 

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