Seafood industry expects strong recovery in operations in coming months

Thursday, Nov 11, 2021 08:45

Production at the Minh Phu Seafood Joint Stock Company. Viet Nam’s seafood export value in the first ten months of this year reached US$7.1 billion. — VNA/VNS Photo Vu Sinh

The seafood industry expects that the Government's support policies will go a long way towards helping businesses restore production and export activities as the end of the year approaches, after the latest outbreak of COVID-19 stemmed business activities.

Last month, the Government issued Resolution 128, which provides guidance on the "safe adaptation, flexibility and effective control of the COVID-19 pandemic". It is intended to create conditions for resuming production and economic development across the economy, including in the seafood industry.

Deputy Prime Minister Le Van Thanh has requested that the Ministries of Agriculture and Rural Development, Labour, War Invalids and Social Affairs, Health, Industry and Trade, and Finance, as well as the State Bank of Viet Nam, cooperate to remove barriers to the production, consumption and export of agricultural products and seafood caused by the pandemic.

"After Resolution 128 was issued, the Vietnamese seafood processing and exporting enterprises quickly restarted production to complete signed export contracts. The production had been suspended temporarily during the social distancing period," said Nguyen Hoai Nam, Deputy General Secretary of the Viet Nam Association of Seafood Exporters and Producers (VASEP).

Huynh Hai Trieu, Deputy Director of Minh Hai Seafood Export Processing Joint Stock Company, said his company must speed up production if they are to meet orders from domestic and foreign partners as planned.

Bui Vinh Hoang Chuong, Chairman of the Director Board of Ca Mau Seafood Joint Stock Company (Seaprimexco), said its factories have increased capacity from 30 per cent to nearly 70 per cent to deliver goods to partners in October and November.

Along with boosting exports by the end of the year, Le Van Quang, General Director of the Minh Phu Seafood Joint Stock Company, has proposed localities encourage farmers to reproduce shrimp for processing export products. This reproduction is expected to ensure supply for shrimp processing.

Nguyen Hoai Nam, VASEP Deputy General Secretary, said: "At present, localities are implementing measures to control the pandemic according to Resolution 128, but the seafood industry still faces issues."

Those difficulties include a lack of raw materials, labour shortages, higher input costs (labour, transportation, equipment for epidemic prevention and production in new conditions), and a lack of capital.

“VASEP has proposed the Ministry of Agriculture and Rural Development (MARD) support enterprises in resuming production and business after COVID-19. The ministry needs to quickly deploy vaccinations for workers, including fishermen, to maintain production activities,” Nam said.

The global supply of shrimp decreased due to the impact of COVID-19 around the world. This will, in turn, lead to an increase in prices in the future, said Ho Quoc Luc, Chairman of the Director Board of FIMEX Vietnam.

Nguyen Quang Hung, Deputy Director of the General Department of Fisheries, said many large fishery producers are still suffering from a lack of labour, including Binh Dinh, Ba Ria – Vung Tau, Ben Tre, Ca Mau and Kien Giang. In addition, export markets continue to strictly control quality and import procedures, especially China.

Therefore, Hung suggested that “MARD prioritises funds for production recovery of fishing supply chains, including the building of cold storage and product distribution systems, and modernisation of infrastructure at fishing ports.”

“At the same time, the ministry needs to strengthen negotiations to expand the export market and remove trade barriers for Vietnamese seafood products, especially negotiation with China, to boost goods circulation at the border gates.”

Le Van Su, Vice Chairman of the Ca Mau Provincial People's Committee, has suggested the Government introduce more supportive policies to overcome those difficulties and help recover operations in the fishing industry.

Phung Duc Tien, Deputy Minister of Agriculture and Rural Development, confirmed that the market potential is very good for seafood products, especially towards the end of the year. On the other hand, the higher prices of seafood on the global market is an opportunity for the domestic fishery industry to resume business and recover some losses sustained over the past few months.

Exports in 2021

According to VASEP, seafood exports in the first ten months of this year increased slightly to 2.4 per cent year on year to US$7.1 billion, including $918 million in October, up 47 per cent compared to September.

The main products that saw an increase in exports were tuna, squid, octopus and shrimp. Molluscs in particular grew in export value by 39 per cent in the first ten months of the year, to $113 million.

The US is still the largest export market for Vietnamese seafood, accounting for 24 per cent of the total export value at $1.7 billion, up 25 per cent year on year. Japan accounts for 15 per cent, or $1.08 billion, of the market. China and Europe both account for 12 per cent at $872 million and $864 million, respectively. Exports to the South Korean market accounted for 9 per cent, reaching $643 million.

According to Nam, there is great potential in seafood exports by the end of this year, but the fishery industry will still find it difficult to achieve its target of $8.8-9 billion set at the beginning of the year.

The demand for seafood import markets is still high and domestic seafood processing activities are resuming. This is expected to ensure that seafood exports grow by the years' end, he said. The US and EU markets have quickly recovered thanks to vaccination and the economy has almost completely re-opened. The Australian and Russian markets also have increased import demands, due to a decrease in domestic output.

However, domestic transport costs and freight rates of ports increased significantly to affect production costs. This is a big obstacle for the seafood export enterprises, according to Nam. — VNS

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