Price of pangansius (tra and basa catfish) for input in Vietnam is ranging between VND19,500 and 21,000 per kilo, but manufacturing mills have had to cut their production by 50 to 60 percent due to lack of input. Enterprises need to consider good buying prices and quick payment to access inputs at the moment.
Good time, but still missing chances
Although the pangansius supply has already been reduced, banks still reject loan applications for raising pangansius. Loan interest rate for these enterprises which is up to banks can come up to 17 percent. Economic experts said this rate is too high in comparison to enterprises’ yield ratio which is currently around 5 percent.
Without loans to provide investment capital, enterprises are forced to negotiate with importers for partial advances in the contract and settle payment immediately after delivery, instead of deferring payment as before. At the same time, enterprises have to pay to access input stock from storage depots while there is so little input.
The peak season for exporting manufactured pangansius is about from September to November. During this time, importers reserve goods for market at Christmas and New Year. This year, export price is at US$4 per kilo of manufactured pangansius in America, at US$2.50 to 2.60 per kilo in Europe, and US$2 per kilo in Asia. Both raisers and enterprises are being effective, but still missing opportunities.
Competition between alliances
The drive for individual benefits in 2008 and 2009 sharply increased input prices. Raisers and enterprises were not cooperating. At the time, big raisers decide to build manufacturing mills with low yield of tonnes per day to produce their own input. Output is provided to commercial exporting enterprises. Price cutting among Vietnamese enterprises for competition is inevitable. The lower the price of input is, the more competitive that product will be. With a total 150 manufacturing mills, Vietnam’s pangansius can compete on the international market. However, at the same time, the 300 some Vietnamese exporters compete with each others for customers.
This fact partially explains why manufactured pangansius is sold by importers in European supermarket at US$7 per kilo, which is nearly three times the price Vietnamese enterprises charge. According to Mekong Delta Fishery Association, loans for pangansius raising and production decreased significantly this year. Pangansius for input is harder and harder to find. Mr Ho Van Hanh, Tan Loc Precinct, Thot Not District (Can Tho), said the current price is only raised by enterprises to “ease” the strain on producers, and will be reduced again in the end.
Accepting selection
Management measures have been worked out for pangansius exports. However, according to exporters, it is not easy to set an exporting floor price since product specification requirements vary with each market and customer. Product quality also depends on the order sample signed with each importer. Therefore, it is only possible to evaluate quality when standards in importing and exporting countries are nearly the same. In addition, in reference to floor price, the question is which office will be responsible to evaluate whether or not quality is corresponding to floor price.
Mr Nguyen Duy Nhut, Deputy CEO, Vice Director of Nam Viet Corporation (NAVICO), said both raisers and enterprises are facing difficult situations. In the current context, enterprises have to accept selection. In the future, the issue of capital for both raisers and enterprises will not be of concern, as according to Mr Nhut, there will be capital inflow where profits are made. (SGTT)
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