Pangasius prices plunge with export challenges

Since the beginning of the year, exports of pangasius have faced many difficulties. This gloomy situation immediately pulled the price of domestic catfish down, which has hit a two-year low. The more farmers sell, more losses they sustain.

Pangasius export targets more than USD 2.4 billion in 2019. Photo: N.Thanh

Disadvantages in the US and China

According to Vietnam Association of Seafood Exporters and Producers (VASEP), for four consecutive months, from March to June of this year, Pangasius export value decreased by 6-17.6% over the same period in 2018. By the end of June, the total value of pangasius export reached US$961.6 million, down 4.1% compared to the first half of the previous year.

Notably, for the large US market, by the end of June, the total value of pangasius export reached just US$141.9 million, down 27.9% compared to the same period last year.

Particularly in June, pangasius export value to this market fell sharply by 40.8%. The important market of pangasius is Hong Kong (China), and the situation is not very positive. In the first six months of this year, exporting pangasius to Hong Kong (China) tended to grow much slower than in previous years. By the end of June, the total value of pangasius export to this market reached US$254.3 million, up 1.2%, accounting for 26.4% of the total export value of pangasius.

Poor exports caused catfish prices to drop in the domestic market. According to the Department of Processing and Development of Agricultural Products Market (Ministry of Agriculture and Rural Development), in general, the market of raw pangasius in the Mekong Delta in the first half of the year tended to weaken after a year of continuous growth.

Pangasius prices dropped by nearly VND 16,000 / kg compared to the same period in 2018 and are at their lowest level in about two years. The wholesale price of raw catfish in the Mekong Delta in June continued the downward trend of about 2,000 VND / kg compared to the previous month, to 22,000-23,000 VND / kg for catfish of type I (800-900g / fish), while buying price is only around 20,000-21,000 VND / kg.

Catching of enterprises is low – mainly catching in fish ponds and restricting buying outside. Due to the decrease in the price of raw catfish, the demand for seed in the population also decreased, and the price of fingerlings also fell sharply. Currently, the price of fingerlings of 30 fish / kg varies from 18,000 to 20,000 VND / kg (while at the end of 2018, the price of fingerlings was 60,000 - 65,000 VND / kg).

"The cause of falling prices is due to a sharp decrease in exports, especially exports to two major markets, the US and China," said the Department of Agricultural Product Processing and Development. Regarding this issue, Mr. Duong Nghia Quoc, Chairman of Vietnam Pangasius Association assessed: “With the current selling price, farmers are losing about 5,000-6,000 VND / kg. The important point is that it is not easy to cut loss because it cannot be sold.”

Promoting major export to China

Regarding the cause of farming and catfish business in the first half of this year after a quite successful year in 2018, talking with reporters of the Customs Newspaper, Mr. Tran Dinh Luan, Deputy Director of the General Department of Fisheries said: “Where pangasius farming is closely linked, regular monitoring is stable, farmers are profitable. The places where spontaneous dig ponds and fish without linking to new businesses, the output is not easy to sell. The falling price of fish mainly falls into cases of digging spontaneous ponds, selling to traders, being forced to price them low. In 2018, the price of pangasius increased, the area of ineffective rice was converted to dig pangasius ponds. The area of breeding and farming area of pangasius therefore increased.”

Regarding the Chinese market, Mr. Luan said: “The main export of Pangasius of companies is normal, but this year China tightened the quota. Previously, Chinese enterprises to Vietnam see that fish is bought, packaged and then brought back, now it is contrary. Purchasing pangasius must have a clear label and address.”

On this issue, according to Mr. Duong Nghia Quoc: “Pangasius farming is massive; it is difficult for farmers. When there are many benefits, people naturally have to find ways to earn income. The problem is that policy mechanisms are still inadequate. For example, the issue of chain linkage, it must improve how people link with enterprises to produce, but that is only one side. The story of planning management, managing the regional links between this province and the other provinces is not available. It is known how to have a regional linkage mechanism among provinces. Another important issue is cross-linking between enterprises. Pangasius companies also make it difficult, when the crisis comes, businesses tackle their own issues without linking with other enterprises," he said.

In order to remove difficulties for the whole industry, Vietnam Pangasius Association requests management agencies to promote trade promotion and solve specific problems. For example, if exporting pangasius to the US, China and Brazil markets is difficult, the management agencies should support businesses to remove them.

"In the long term, the pangasius industry must integrate into the international market, ensuring standards of origin, food safety and branding. Vietnamese pangasius has no brand. If the integration is completed, but the completion is not done well, the output will be only used inland. This makes it impossible for businesses to do it themselves, they need the support of state agencies, typically the Ministry of Industry and Trade and the Ministry of Agriculture and Rural Development,” Mr. Quoc said.

Mr. Luan said regarding farming, the key is to promote farming with close linkages according to international standards, which can be traced to ensure clear origin. As for exports, currently, the orientation is to continue to expand the Chinese market in the direction of main exports, creating a long-term stable supply and demand. Hopefully, in the first half of the year, China imported a lot of pangasius which has all been consumed. In the second half of the year, demand will increase, Pangasius export will be pushed more strongly. In addition, Pangasius export also has to expand to other markets, especially markets in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and Vietnam-EU Free Trade Agreement. (EVFTA).

Recently, the Directorate of Fisheries has sent a number of officials to key catfish farming provinces (including An Giang, Dong Thap, Can Tho, Vinh Long and Long An) for statistics and checking the actual situation of quantity of fish that are being raised and the ability to balance supply and demand from now to the end of the year. It is expected that the end of July will have official test results.