Pangasius - November 2009

01/11/2009

Pangasius back into full swing - Viet Nam exported 334 000 tonnes of catfish in the first eight months of 2009, worth an estimated USD 737 million. The sector thus became the top foreign currency earner among seafood exports. Early in 2009, exports experienced a sudden set-back, partly because of economic problems in some of the main markets, but mainly because Russia imposed a temporary block on imports.

Since May 2009, exports of catfish have shown signs of recovery in many markets, with the exception of Russia, where media reports claimed that the country remained concerned about the quality of pangasius from Viet Nam. However, Russia agreed to import 10 000 tonnes of catfish a month from September 2009, which should boost total exports. Viet Nam predicts that USD 1.4 billion worth of catfish will be exported this year. Catfish exports have recovered as a result of economic improvements in key markets and because the Vietnamese seafood sector has been proactive in seeking new markets. Land set aside for catfish farms in the Cuu Long (Mekong) Delta region has reached 5 154 ha, a 15% increase compared with last year.

Farmers in the region harvested 457 000 tonnes of catfish in the first eight months of this year, an increase of 13.5%. As a result of this good production and other market factors, processing companies reduced the price of catfish to VND 13 500-15 500/kg (USD 0.75-0.87/kg). In the EU, prices fell from USD 2.63/kg to USD 2.47/kg. At present, Viet Nam produces 4.3 million tonnes of fish feed a year, including 88 plants that produce feed for tra and basa catfish.

In the first seven months of 2009, Viet Nam exported 325 900 tonnes of pangasius, a 5% decline from the corresponding period of 2008. The EU continues to be the main market for pangasius from Viet Nam. Imports increased slightly in the first seven months of the year. Russian imports were only 16 800 tonnes, 50 000 tonnes less than in the same period of 2008 as a result of the ban on imports imposed in the early months of the year. Recovery has already begun in September, but it is unlikely that the record 118 000 tonnes imported in 2008 by Russia will be exceeded this year. In addition, the policy of the Russian fisheries directorate is to supply the domestic market with Russian products from the Pacific, rather than to import fish products. This policy is likely to have a marked effect on the supply of fish to Russia in the coming year.

Viet Nam is the main supplier to the US frozen catfish market. Despite various anti-dumping actions by the US authorities imports continue to be strong. However, Vietnamese catfish producers fear that the proposal made by the USDA to officially redefine pangasius as catfish and thus to include it in the USDA food law rather than the FDA system will have an extremely negative effect on trade with Viet Nam and will be a new barrier to exports of pangasius. This move by US domestic catfish producers is designed to protect their industry from cheaper imports. The USDA inspection system is much more rigorous than the FDA system and its requirements would effectively stop imports until Viet Nam could complete the new quality control process. US fish processors and the Vietnamese government are working to oppose this proposal, and the head of NFI says that such a move could damage trade between the two countries. Meat exporters from the USA to Viet Nam are also concerned about possible retaliations as a result of this move so it is unlikely that any decisions will be reached in the short term.

In the first six months of 2009, catfish imports by the USA from Viet Nam totaled 16 400 tonnes, a 25% increase over last year. In contrast, China, which had stricter controls imposed on its catfish exports, reported a 50% reduction in exports of catfish to the US market.

The outlook is unsettled

The same pattern as last year, with good production but declining prices, seems to be being repeated this year. Eventually this could again lead to lower production in Viet Nam. However, demand is picking up again in Europe, where pangasius is a well accepted fish and the present low prices should also help further penetration of the Eastern European markets.

At present, Viet Nam has 30 companies that are permitted to export tra fish and seafood to Russia. Since the Management Department of Pangasius Exports to Russia was set up, Vietnamese seafood exporters and their Russian partners have reached a number of agreements on the quality, quantity and price of imports. These agreements have helped to ease difficulties for pangasius farmers in the Mekong Delta. Viet Nam’s pangasius exports to Russia may reach 70 000-80 000 tonnes, worth hundreds of millions US dollars this year.

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