In the past 10 months, although the Vietnamese seafood industry has achieved export turnover of US$5 billion, many seafood processing businesses are on the verge of bankruptcy.
Hard to achieve US$ 6.5 billion
Ms Duong Phuong Thao, Deputy Director of Import-Export Department, Ministry of Industry and Trade revealed that the growth of the seafood industry in 2012 recovered in the first quarter, slowed down in the second quarter and showed signs of dropping in the third quarter. Shrimp suffer particularly from epidemics and face fierce competition from Thai and Indian markets. For catfish, the raw material price keeps increasing while consumption price remains low. Therefore, it is very difficult to achieve US$ 6.5 billion as initially planned for 2012.
Particularly in the Mekong River Delta, from the beginning of the year, many businesses have gone bankrupt and many farmers have ceased working on the farming ponds. According to experts, in the last five years, due to the hot credit growth policy and loosening of the banking system, a series of sub-standard seafood processing plants were built in the Mekong Delta, leading to improper competition and adversely affecting production efficiency of the industry. It was estimated that more than 80 percent of factories, which were born due to hot credit growth are currently on the brink of bankruptcy…
As for the shrimp industry, from 2011 to the present, most of the shrimp farming areas in the Mekong Delta are affected by epidemics. This is a consequence of massive development in the shrimp farming zoning and not following designed and detailed planning, as farmers and processing plants do not comply with safe production process. Therefore, Vietnam's shrimp industry meets many technical barriers when it exports products to traditional markets.
Mr Nguyen Van Khoi, Deputy Director of Soc Trang Department of Agriculture and Rural Development disclosed that in the season of 2011 and 2012, the province made a loss of over VND 4,000 billion due to shrimp mortality.
Restrict unfair competition
According to most scientists and managers, seafood producing, processing and exporting industry only grow in terms of volume. The most typical is catfish, which is currently the export strength of Vietnam. However, the unfair competition of a number of businesses leads to a low domestic purchase price.
Mr Phan Kim Sa - Deputy Director of Dong Thap Department of Trade and Industry proposed: "The government needs to issue a specific regulation on floor price. Export businesses need to apply this price to raise the domestic purchase price. "
In the long run, it is important to work out solution on farming zone planning with an aim to raising the value of seafood products to help farmers achieve the maximum profit. In particular, the state should play a monitoring role to curb unfair business competition.
Dr. Nguyen Van Hao, Director of the Research Institute for Aquaculture No.2 proposed: “Localities need to follow VIETGAP model in the production process. By this way, we will not have to encounter with technical barriers from importing countries. "
Mr. Vu Van Tam, Vice Minister of Agriculture and Rural Development stated that it is necessary to reorganize the process of negotiation and signing of contracts for export of major seafood, in which associations and organizations are expected to play a key role. Attention should be paid to actively seeking for non-state budget fund to revive the seafood industry that has been growing slowly in the last months of 2012.
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