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| Processing shrimp at Minh Phu Seafood Company. Farmers are stockpiling shrimp, creating a lack of supply for processing firms. — VNA/VNS Photo Tran Viet |
HA NOI (Biz Hub)— Farmers are holding onto their shrimp to capitalise on further expected price increases, but the action may harm shrimp profits for enterprises that have pinned their hopes on export demand.
Supply factors, including shrimp diseases and competition from foreign shrimp buyers have pushed up the price of shrimp by VND40,000 (US$1.9) per kilo during the past two months and VND70,000 ($3.3) during the past year to VND240,000 ($11.4).
Farmer profits have jumped significantly due to the higher prices, particularly in the current harvest, according to shrimp producers in southern Tra Vinh and Ca Mau provinces.
However, enterprises are taking a hit due to the lack of shrimp supply as farmers continue stockpiling shrimp, waiting for the market to spike.
Deadlines for shipping shrimp exports are fast approaching, forcing many enterprises in the two mentioned provinces to concede losses by purchasing shrimp from other provinces, said the representative of the Minh Phu Seafood Joint Stock Company.
The Cuu Long Seafood JS Company based in Tra Vinh Province said the competitiveness in purchasing shrimp has happened since the early of this year so the company has had many difficulties in purchasing shrimp and export processing activities.
The company has bought shrimp at the higher price, but has fallen short of export shrimp processing activities, reaching only 53 per cent of its export target in the first eight months of this year.
Le Van Quang, general director of Minh Phu Seafood JS Company, said farmers believe the shrimp price will continue to rise in future and are hoping to sell their produce at higher prices.
The action poses dangers to enterprises relying on shrimp farmers and facing export contract deadlines before October 15. After the deadline, enterprises will be unable to buy shrimp for their own production, Quang said.
The Ca Mau Agriculture and Rural Development Department recommended farmers end the cut off of shrimp to the market, fearing long term damage to shrimp export activities.
According to the Ministry of Agriculture and Rural Development, shrimp exports in the first nine months of this year reached $2 billion, including $952 million from white-leg shrimp exports - 80 per cent higher than the same period of last year, and $928 million from prawn shrimp exports - an increase of 2.1 per cent. — VNS