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Tra fish industry caught in upstream and downstream tangle   2009-06-01 - TBKTSG

 
 
Tra fish are processed at a facility in the Mekong Delta. The industry has been hard hit at all levels – production, processing and exports.  
The tra fish industry is bogged down in a stalemate that shows no sign of breaking as farmers choose to abstain from breeding and exporters are hit by falling demand.

 

According to the Aquaculture Department under the Ministry of Agriculture and Rural Development, the total area for tra fish (pangasius) farming has shrunk 30 percent from a year ago, after farmers hit by huge losses stopped breeding them.

In the Mekong Delta province of An Giang, for instance, the current tra fish area is about 1,000 hectares, 400 hectares less than last year. The output in April dropped 20 percent from March to around 25,000 tons.

Meanwhile more than 360 hectares of tra fish ponds in Dong Thap Province have been left idle for a year. The tra fish output of the province is expected to drop by 40 percent by the end of September.

Shrinking fish farms will lead to raw material shortages for processing enterprises at the end of the year, the Aquaculture Department warns. Tra fish can be farmed throughout the year in the Mekong Delta and farmers start harvesting their crop after six months.

Farmers in the region say that after consecutive price drops last year, tra fish prices have recovered to around VND16,000 (US$0.90) recently, which means they no longer suffer huge losses although the profit margin is still very small.

But many tra fish farmers say they have lost confidence, and are concerned that if they all start breeding the fish again, prices will fall again as supply increases. Some of them now work for seafood companies and get paid to breed the fish for those companies.

As breeders downsize, other businesses in the seafood industry have struggled with falling demand for fish feed and fingerlings.

A salesman for a fish feed company, who wished to be unnamed, said sales at his company so far this year have dropped by half compared to the same period last year.

“Farmers calculate expenses very carefully as selling prices [of the fish] are not high,” he said.

Hoan Thanh, a group of tra fingerling providers in An Giang Province, said it has had to cut back on production. The group said it has sold some 80 million fingerlings this year, a decline of as much as 70 percent over a year ago.

Downstream plight

The situation is not much better downstream for the tra fish industry with processors and exporters facing their own difficulties.

Seafood exports in the first four months fell 6 percent from a year earlier to $1.05 billion as the global recession hurt demand. Tra fish exports alone fell 0.42 percent in volume terms to 161,826 tons, the industry’s first ever contraction.

The Ministry of Agriculture and Rural Development said falling demand, together with several allegations in important markets like Russia, Egypt and Italy that Vietnamese tra fish was unsafe, caused many difficulties for local exporters.

Russia in April lifted a ban on imports of seafood products from Vietnam that it had imposed last December. Although the market has been reopened, exporters say prices are still low, at around $2 per kilogram of tra fish.

Ngo Phuoc Hau, general director of An Giang Fisheries Import and Export Joint Stock Co., said prices for US exports were higher at $3.16 a kilogram.

Agifish, as the company is known, said it will increase tra fish shipments to the US this year. However, the company said it could be a difficult task as tra fish would be subject to more stringent inspections by the US Department of Agriculture if the US 2008 Farm Bill is passed.

“It’s hard to forecast market prospects,” said Nguyen Dinh Huan, Agifish deputy general director. The company’s exports have dropped about 30 percent compared to a year ago.



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