During the past two years, fish sauce producers in southern Kien Giang Province's Phu Quoc Island have reduced production due to difficulties in securing anchovies at reasonable prices.—Photo baoninhthuan

HA NOI (Biz Hub)— Ensuring reliable sources of raw produce has become a major headache for many of the country's fisheries processors.

Nguyen Thi Tinh, chairwoman of the Phu Quoc Fish Sauce Association, said Phu Quoc fish sauce was missing out on its great potential to gain market share overseas due to a shortage of anchovies.

The domestically well-known brand of fish sauce has been granted Protected Designation of Origin (PDO) status in the EU and passed all of the union's food safety regulations.

But the famous sauce, the first-ever Vietnamese product to be granted PDO status in the EU, is now failing to exploit this status, said Tinh.

During the past two years, fish sauce producers in southern Kien Giang Province's Phu Quoc Island have reduced production due to difficulties in securing anchovies at reasonable prices.

On average, the island's fish sauce sector uses 40,000-50,000 tonnes of fish every year to produce fish sauce, Tinh said. But so far this year, fish sauce processors have only managed to secure 30 per cent of the annual volume for processing, while fish sauce sales have reduced by 60 per cent against 2012.

Tinh said part of the problem was that fishermen were selling less of their anchovy catches to fish sauce producers as they were making more money selling directly to traders.

Anchovies were sold to traders at prices of VND18,000-20,000 (US$0.85-0.95) per kilo, 2.5-3 times higher than prices for sales directly to fish sauce processors.

Due to a lack of raw materials, 60 per cent of the fish sauce producers on Phu Quoc Island must stop processing fish sauce and now only 80 fish sauce factories are continuing to do business, she said.

Nguyen Huu Dung, deputy chairman of the Viet Nam Seafood Exporters and Producers (VASEP), said seafood processors often faced a lack of raw materials and 90 per cent of processors in the sector needed to import material every year to ensure production.

This year, the fisheries industry was expected to increase imports of raw material by 20 per cent against last year, Dung said. The import value of seafood products for export processing was estimated to reach as high as $1 billion this year.

Experts said the lack of raw materials was a persistent problem for processors as the sector didnot have an effective general plan on developing cultivation of raw materials while co-operation between enterprises and regions was also ineffective.

Some provinces had general development plans, however these plans were not implemented effectively, he said.

This had resulted in an imbalance between the great number of seafood processors and limited areas for aquaculture cultivation.

To solve the problem, experts said enterprises should invest into cultivation and strive to secure the support of farmers in developing these areas. They should also work more closely with farmers to ensure raw materials for processing. — VNS