Overview
Seafood

THE FISHERIES INDUSTRY

Fisheries is a large and growing industry in Vietnam and provides international businesses with good market opportunities, also for Danish companies.  

 

Overview
2009 was perhaps the biggest test to date for Vietnam’s Fisheries sector. A global financial crisis, new international regulations and aquatic product quality issues all had an effect. However despite a drop in export turnover Vietnam consolidated its position as a major ‘seafood’ exporting country and is now ranked 5th worldwide.

Fish and shellfish production in 2009 increased 4% from 4.58 to 4.78 million tons (2.51 million MT from aquaculture and 2.27 million MT from capture fisheries - marine and inland combined).

In terms of value the total fisheries exports amounted to US$4.2 billion, a drop of US$300 million, 6.6% down on 2008 export turnover figures.

As with previous years the main export earner was shrimp with a total of around 209,000 mt worth US$1.68 billion, an increase of 9% by volume and 3% of value.

The aquaculture production increase continues the trend for aquatic products to come mainly from culture systems than capture.

Pangasius exports reached 607,665 MT, worth close to US$1.34 billion, a decrease of 5% and 8% in terms of volume and export value respectively when compared to 2008.

With a closer focus on climate change events in Vietnam there have been a series of studies carried out to generate vulnerability maps identifying which provinces are most susceptible to the potential impacts of climate change regarding their fishery and aquaculture production systems.
 
Markets
Vietnam continued to export to over 150 countries. The main importer of Vietnamese aquatic products was the EU with 26% of Vietnam’s export turnover. Japan was second with 18% followed by the USA with 17%.

Processing overcapacity
Processing overcapacity is still an issue of concern. At the end of 2009 plans were unveiled to upgrade technological aspects of cold-storage systems to help meet the export target of US$5.5 billion by 2015. 584 facilities with a capacity of < 100 mt, 254 < 300 mt and 50 of > 500 mt will be built. The ability to fast freeze will be incorporated in all updated units. This will go some way to improve quality and take advantage of seasonally high yields, freeze now and market when the price improves. Those companies building new facilities will receive preferential loans and advantageous land use leases.

Subsidies
Fisheries sector subsidised loans of up to 24 months duration and 2% interest rate subsidy were to have been phased out but were continued throughout 2009 and into 2010. They will be available on long and medium-term Vietnam Dong loans for fisheries (aquaculture, capture and processing). By December 2009 US$3.7 billion worth of long-term subsidized loans to the agriculture, forestry and fisheries sectors were outstanding with US$21.6 billion outstanding on short-term loans.

Quality
As mentioned above the ability to Individually Quick Freeze (IQF) and rapid freeze volumes of fish will be increased.
Scaling back production and focussing on quality should help both pangasius and shrimp production with, cleaner production, reduced mortalities and better market acceptability / price.

2010
Technical barriers to trade (TBT) caused problems for the pangasius industry with the 2008 USA Farm Bill, taking effect on 01.01.2010. Under the bill, Vietnamese pangasius species are named ‘catfish’, previously (Farm Bill 2002); the fish was correctly called pangasius. This will probably cause the USA catfish producers association to complain about ‘unfair’ competition.

EC regulation 1005/2008 to prevent, deter and eliminate illegal, unreported and unregulated (IUU) fishing also came into effect on 01.01.2010. This has already had an impact on fish prices in 2010 with Tuna being rejected from those boats without catch certificates or being accepted only for the local market at prices 15% below those paid in December 2009.
Consumer demand

As with 2007 and 2008 there was increased demand for pangasius fillets in 2009. However competition at production, processing and exporting levels has combined to drive the price for this normally high quality product down. With many producers barely breaking even and some even making a loss, the tendency to ‘cut-corners’ and use banned antibiotics to avoid mortalities has lead to complaints about quality from some buyers. The industry would do best to reduce production, increase quality and subsequently the price. This would also help mitigate potential losses due to climate change impacts.

Sustainability
Major retail outlets like Wall-mart and its European subsidiary supermarkets continue to demand aquatic products from environmentally and socially certified production systems both capture (Marine Stewardship Council MSC) and aquaculture (Aquaculture Certification Council ACC).

The number of ACC certified farms is increasing worldwide but only two shrimp farms and hatcheries are currently certified by ACC in Vietnam. (Asia Hawaii Ventures Corp., part of Asia Hawaii Ventures Corporation, Tuy Hoa District, Phu Yen Province and Minh Phu - Kien Giang Seafood Company, Ltd., Kien Luong Dist., Kien Giang Province).

There are seven ACC certified processing plants in Vietnam: 1) Grobest and I-Mei Industrial Co., Ltd, Gia Rai District, Bac Lieu Province, Vietnam; 2) Minh Phu Seafood Corp. , Camau City, Camau Province; 3) SAOTA Foods Joint Stock Company , Soc Trang, Soc Trang Province; 4) Vietnam Fish One Co., Ltd., Phung Hiep District, Hau Giang Province; 5) Investment Commerce Fisheries Corp, Ho Chi Minh City; 6) Truc An Company, Ltd., Nha Trang, Khanh Hoa Province; and 7) Amanda Foods – Vietnam, Bien Hoa City, Dong Nai, Province.

Vietnam is the first country in Asia outside Japan to have a fishery certified by MSC (Ben Tre Clam fishery). Other fisheries to be pre-assessed soon may include the Phu Quoc anchovy fishery (used for the Phu Quoc fish sauce) and the Scallop fisheries in Hòa Thắng commune, Bắc Bình district, Bình Thuận Province.

Vietnam has been attempting to diversify its aquaculture production with considerable funding given to research and development (R&D) at its research establishments. There is a long list of new species successfully developed in hatcheries but none of these are coming close to challenging shrimp and pangasius in terms of production tonnage or export potential.

Some of the ‘new’ species being produced are exotics and will only supply niche markets, for example rainbow trout and sturgeon. However the potential for large scale seaweed, bivalve mollusc and rabbit fish culture has, as yet, not been developed. The prospective here is even more interesting when considering the ability of these species to be cultured in systems that are less prone to the negative impacts of climate change and can draw on increased primary productivity generated by sea temperature rise and increased nutrient levels produced from increased run-off from agriculture systems.

The Vietnamese Ministry of Agriculture and Rural Development (MARD) has recently established a Directorate of Fisheries (D-Fish) with 9 Departments. The intention being to ensure that the focus on Fisheries is as it was under the now merged Ministry of Fisheries. It remains to be seen how effective this move will be. Danish International Development Assistance (Danida) will assist with the establishment of the D-Fish and information communication technology upgrading in 2011.

Source: www.ambhanoi.um.dk