Seafood Export: Enough Solutions, Lack of Implementation

In early 2013, when the seafood industry targeted to raise exports to US$6.5 billion, many argued that this figure would be difficult to achieve, but at the end of the year, the whole industry reached US$6.7 billion. So is US$6.7 billion feasible this year?

Optimistic outlook
A report by the Vietnam Association of Seafood Exporters and Producers (VASEP) showed that in January 2014, seafood exporters raked in US$552 million, an increase of 13.9 percent over the same period. It is a positive sign for seafood exports in 2014.

 

According to Nguyen Thanh Hung, Director of Hung Hanh Seafood Joint Stock Company, in early 2014, there are signs showing that opportunities are opening up for Vietnam’s seafood enterprises. For example, Japan and Australia are more open to seafood imported from Vietnam; TPP agreement also paves the way for seafood products into Japan and the U.S. Domestically, after years of looking for the solution to remove difficulties, the imbalance between aquaculture production, declining demand and high interest rates have somewhat improved.

According to VASEP, in addition to maintaining the traditional markets, in 2014 Vietnam should pay more attention to China - the market with highest growth rate of seafood imports from Vietnam. Currently China has surpassed South Korea to become the 4th largest seafood importer from Vietnam (after the United States, EU and Japan). With high economic growth, large population and great demand for imports, China is seen as a potential market for the penetration of Vietnam’s seafood companies in the future.

Mr Truong Dinh Hoe, Secretary General of VASEP, said: "The shrimp exports made great breakthrough with revenue of US$3.1 billion in 2013. It is expected to maintain this revenue in 2014. While pangasius exports still face many difficulties due to markets and prices, thereby dragging domestic raw material prices so that they cannot be increased. For a long time, pangasius farmers in the Mekong Delta faced losses, and fishing area and fish production thus decreased. It is forecast that pangasius export in 2014 ranges about US$1.6 billion, decreased by 5 percent compared to 2013."

According to analysts, a special advantage which is vital to the seafood industry is that after a long time of "sickness", the “health” of the industry is getting better. Accordingly, the difficulties of the market recently have removed many investors that are fragmented and unprofessional, leaving only the truly stable businesses having their own capital, markets and breeding techniques. "It is a sign that Vietnam’s seafood is moving toward a sustainable future, so the export target of US$6.7 billion this year is within reach," an expert said.

However, difficulties facing this sector are equating advantages. According to many experts, the political instability of the Eastern European countries recently with the U.S. Farm Bill have made a huge impact to Vietnam’s pangasius exports. Along with that, the difficulties such as seafood prices fluctuation and tend to fall in the main export markets of Vietnam, unstable domestic materials, epidemic (in shrimp) and rising production costs make farming area narrowed, and yield and production reduced in 2014 and subsequent years.

According to Mr Linh from Thuan Phuoc Company, if it is based solely in a traditional manner such as exploitation of Vietnam natural conditions and cheap labour, the industry will only export just US$5 billion. But the natural and human resources are not always available, so Vietnam’s seafood has a lot of work to do. They should boost prepared products and value-added products. But this is not easy because he noted that to produce value-added products, only one word "stability" is puzzling enterprises, which requires stable quality, price, delivery time and product quality. To meet these demands requires a long preparation process from low to high on governance, facilities, workforce, and on the road looking for their markets, Vietnam’s seafood should see this as a good opportunity to find way out of crisis. "With Thuan Phuoc Company, despite difficult market conditions, thanks to this approach, we have surpassed by 50 percent the target set in the beginning of the year, raising exports to more than US$90 million," Mr Linh added.

 

Meanwhile, for his part, Nguyen Minh Chanh, Deputy General Director of Da Nang Seaprodex, said that material is the crux of the problem by accounting for over 80 percent of the material value, while Vietnam’s seafood products always encounter shortages of raw materials. Therefore, for sustainable development, the government should consider it as a key industry to focus on, as well as issue policies to support enterprises.

Also on the issue of raw materials, according to the judgement of many experts, the aquaculture sector for many years, too, has to depend on imported breed and food because we are not so much focused due investment in the production of high quality breeds, disease and production of aquatic feed. In fact, 100 percent of the current food serving shrimp industry and about 75 percent of food serving fish are the products of FDI companies. "Last time there were a lot of meetings on fisheries, but eventually they were forgotten and everything was stalled. The problem now is how to implement these plans into practice because if the main stage of implementation is weak, solutions will not be as effective as expected," an expert said.