Exporters are worried about a rapid increase in the price of pangasius catfishes

The price of pangasius is increasing sharply, making the farmers excited, but the export processing enterprises have difficulty in fulfilling their signed orders.

The price of pangasius catfishes has increased, bringing profits for farmers.

According to the Vietnam Association of Seafood Exporters and Producers (VASEP), in the first week of April 2017, the price of raw fishes in the Mekong Delta suddenly increased to 25,500 vnd - 27,000 vnd per kg. Some factories even have to buy fishes at the price from 27,500 vnd to 28,000 vnd per kg. With the orders being signed, many small businesses are suffering from heavy losses or can not continue production. With the next order, it is very difficult for enterprises to negotiate to raise prices.

In the first two months of 2017, pangasius catfish exports reached $US 228.8 million, a decrease of 3.6% compared the same period last year. Of which, pangasius catfish exports to the US decreased by 34.7%; pangasius catfish exports to EU decreased by 19.2%; pangasius catfish exports to the ASEAN decreased by 17.9%; pangasius catfish exports to Colombia decreased by 26.7%; and pangasius catfish exports to Saudi Arabia decreased by 0.3% compared to the same period in 2016. The decline of pangasius catfish exports to the US market and the strong growth in China - Hong Kong market made China - Hong Kong become the leading import market of Vietnam pangasius catfishes, accounting for 17.2% of the total exports.

The shortage of seeds at the beginning of the year due to unfavorable weather, a decline in farming area and an increase in the demand of China and Hong Kong have pushed up the price of catfishes at the highest level in the first week of April 2017. This has been also the highest price since 2010.

According to some large pangasius catfish exporters, raw material prices may be higher in the coming time, but not too high. The import market is unlikely to adapt or accept new prices quickly and in the next few months, new catfishes will make up for this shortfall.

Mr. Duong Ngoc Minh, the Chairman of the Board of Directors, the Director General of Hung Vuong Joint Stock Company - one of the largest pangasius catfish exporters in Vietnam said that the cause was due to the high demand of the market, especially the Chinese market, while the current supply of raw materials was limited. Specifically, the price of raw pangasius catfishes reached 27,000 vnd per kg - the record over the past 10 years and this price can be maintained for a while longer. The high price of catfishes and the limited supply have increased the pressure on the export processing factories.

According to the Ministry of Agriculture and Rural Development, many losses in 2016 caused many farmers who raised pangasius catfishes to delay production while businesses strengthened their purchase to serve export orders, which led to the current high price. Accordingly, farmers can earn from 500 vnd to 2,000 vnd per kg.

In the current situation, many farmers continue to invest again, resulting in the price of pangasius catfish seeds increased by 1.5 - 2 times compared to the same period last year. Pangasius catfishes in the first three months of 2017 were estimated at 247.6 thousand tons, an increase of 1.5% compared to the same period in 2016.

An increase in raw material price also caused the export price of pangasius catfishes to increase. According to VASEP statistics, the price of pangasius catfishes sold in Asia in February 2017 was $US 2.7 per kg and it is expected to increase to $US 2.8 – $US 3 per kg in April 2017. Meanwhile, the demand for imported raw catfishes of China market is forecasted to continue rising in the coming time.

Other companies said that another reason was that in 2016, many households raise catfishes of 700-750 grams for sale to export to China. In the coming time, companies in China, Hong Kong, and the US can accept higher prices but with other big markets such as EU, Mexico, Colombia or ASEAN, it is difficult for domestic enterprises to reach an agreement.

According to domestic enterprises, in the case where from the end of August 2017 to early September 2017, pangasius catfish exports to the United States encountered difficulties from inspection programs with a high anti-dumping tax, pangasius catfish exports are likely to decrease dramatically.

Currently, the average price of pangasius catfishes in some large markets increases by 10 to 15% compared to the previous time. It is expected that the price of catfishes may increase to $US 2.75 - $US 3 per kg. The Chinese market is now turning to import Vietnamese boneless pangasius catfishes. Therefore, the demand for catfishes will continue to increase in the coming time. Some large enterprises exporting pangasius catfishes to China said that this market had a very quick reaction in price and customers were willing to accept higher prices but there were many risks in payment.

With enterprises having their own area to raise catfishes, the impact of raw material prices was not really heavy. However, with businesses buying large amounts of raw materials outside, they are facing many difficulties. An increase in export prices is a good sign, however, in the current situation, when some markets do not respond timely, some enterprises have no choice but to stop production because changing the market at this stage is not easy.