Vietnam's seafood exports: Facing the problem of injecting impurities and inserting bamboo toothpicks

In addition to objective barriers, many experts are concerned that the Vietnamese seafood industry is making things difficult for itself by not maintaining quality and brand...

In a series of seminars on the prospects of the Vietnamese agricultural market in 2016 organized by the Institute of Policy and Strategy for Agricultural and Rural Development (Ipsard), mentioning the future of the aquaculture industry, in addition to objective barriers, many experts are also concerned about the situation of Vietnamese people making it difficult for themselves in the world market.

Missing link…

Information at the conference showed that our country's seafood export turnover reached 6.7 billion USD in 2015, but the seafood industry still depends on 70-80% of foreign animal feed. Moreover, even in the tra and basa fish industry, Vietnam is considered a single market with very large production, so it should be able to proactively determine prices, but in reality it cannot. There are even situations where prices drop to the point where farmers abandon their ponds.

Commenting on this situation, Mr. Nguyen Viet Thang, Chairman of the Pangasius Association, said that one of the important reasons is the lack of connection between seafood processors in our country and the lack of community in export activities. Mr. Thang assessed that the connection between processors is currently very poor. While our ancestors said "buy with friends, sell with partners", in reality the seafood industry has not been able to do so. "If we do not build groups like this, the price of pangasius will go down even more.

Sharing about this situation, Mr. Le Van Quang, Chairman of the Board of Directors, General Director of Minh Phu Seafood Corporation, told a real story: “There was a time when we set a floor price but gave customers 20 cents, 30 cents back. They said buying Vietnamese fish was cheap but never made a profit because they just bought it for 4 USD but halfway there, someone sold it for 3.8 USD, creating a 3.5 USD market. That is why the price of fish dropped rapidly. There was a time when I worked with customers, they said Vietnamese tra and basa fish were delicious, they liked it very much, the price of 10 USD was still cheap, but now it is only under 3 USD. They said Vietnam is like carrying gold to dump in the sea”.

Mr. Pham Anh Tuan, former Deputy Director General of the Directorate of Fisheries, added that the rapid decrease in fish prices was also due to the imbalance between supply and demand. Because the farming output was pushed up too quickly at times, at first only a few hundred thousand tons, but a few years later the number had increased to several million tons. However, profits did not increase but decreased, so there was a situation where farmers switched to producing poor quality products.

Adverse weather and 'attack' of impurity pumping

Assessing the prospects for Vietnam's seafood exports in 2016, Ms. Le Hang, Deputy Director of the Vaseppro Center (Vietnam Association of Seafood Exporters and Producers), predicted that the country will face many challenges such as drought, salinity, high anti-dumping tax on pangasius and shrimp, increasing raw material prices making it difficult to compete, etc.

The latest report of the Ministry of Agriculture and Rural Development also shows that aquaculture output in the first 5 months of the year increased by 0.2% compared to the same period last year, reaching 1,149 thousand tons. In particular, with tra fish, due to the unstable demand for input materials of enterprises, the price of tra fish sometimes increased and sometimes decreased, farmers mainly produced to hold on, not stocking much. The output of tra fish harvested in the first 5 months of 2016 of the Mekong Delta provinces decreased significantly (-7%) compared to the same period, estimated at 358,508 tons.

As for shrimp, the unfavorable weather in May has greatly affected shrimp production. The shrimp area was damaged quite a lot, mainly due to hot weather and high salinity. In addition, poor quality seeds are also a major factor causing a lot of shrimp deaths. The output of black tiger shrimp and whiteleg shrimp in the provinces of the Mekong Delta in the first 5 months of the year decreased compared to the same period last year.

In that context, the Ministry of Agriculture and Rural Development estimated the value of seafood imports in the first five months of 2016 at 386 million USD, down 9.2% compared to the same period in 2015. Previously, in 2015, seafood exports reached 6.57 billion USD, down 16.1%. Of which, shrimp exports reached 3 billion USD, down 25%; tra fish exports reached 1.56 billion USD, down 11.5%. Exports decreased sharply, but the area of ​​black tiger shrimp in the Mekong Delta increased in both area and output by 1.59%; 4.3% respectively.

According to Mr. Le Van Quang, Chairman of the Board of Directors and General Director of Minh Phu Seafood Corporation, those figures do not accurately reflect the current situation of shrimp farming in Vietnam. Because, in fact, the increase in black tiger shrimp output in the first 4 months of 2016 was due to the carryover of 2015 inventory, not an increase in production. At processing plants, it was only 30-50% compared to the same period in 2015.

In particular, Mr. Quang said, "We went to the ponds to investigate, the area for stocking from the beginning of the year until now is only about 20%, many households have had to suspend their ponds."

More sadly, according to Mr. Quang, while the market is becoming more demanding and competition is increasing, there is a situation where black tiger shrimp is facing the problem of injecting impurities and inserting bamboo and coconut toothpicks. Citing a story after a business trip to Japan, Mr. Quang said that Japanese customers think that is the reason why they do not buy Vietnamese black tiger shrimp but instead switch to buying black tiger shrimp from the Philippines and Indonesia even though the price of black tiger shrimp from these two countries is 2-3 USD higher than that of Vietnam. Many big customers from many other countries "turn their backs" on Vietnamese black tiger shrimp.

Looking back at the price of tiger shrimp in 2015, Mr. Quang said, “It has dropped dramatically and is currently (mid-2016) very low. For example, the price of tiger shrimp from Indonesia, size 16-20, is 15.8 USD, while shrimp from Vietnam sold to Japan is only about 13 USD. The important reason is that because a few traders are dishonest and fraudulent, customers refuse to buy, causing inventory to be stagnant, forcing businesses to reduce selling prices.

According to VOV