Viet Nam’s farmed pangasius industry, the largest in the world, took in just over USD 1 billion in export revenue over the first six months of 2018, boosted by particularly strong sales in China and record high prices. Production growth in Viet Nam is now expected to slow and the relative importance of other producers is set to increase.

The most recent industry stakeholders’ estimates for global pangasius production growth in 2018 are around 7–8 percent, but this is seemingly insufficient to rein back the steep upward price trend which has been the major feature of the market since mid-2017. While anti-dumping duties and stricter inspection procedures have hindered US pangasius imports in recent years and the long-lasting impact of negative media coverage has done the same in the EU28, demand from China and other Asian markets, particularly in the ASEAN bloc, is strong and strengthening. This has pushed global prices to record levels, with pangasius fillets out of Viet Nam selling at USD 3.35 per kg (FOB Ho Chi Minh City) as of October 2018, almost 30 percent above the same month in 2017. In addition to the traditional role of pangasius as a commodity whitefish, the species is also gaining traction as a premium seafood option. Efforts continue on all fronts to improve the sustainability of the production process and to effectively communicate these improvements to the consumer through ecolabelling and the associated standards. 

Viet Nam

According to statistics published by the Vietnam Association of Seafood Exporters and Producers (VASEP), the respective shares of Vietnamese pangasius export value over the first six months of 2018 were 25.1 percent for China (including Hong Kong SAR), 19.6 percent for the United States of America and 11.7 percent for the EU28. The total value of exports directed to these same markets over the same period was, respectively, USD 251 million, USD 197 million and USD 117 million, equating to increases of 46.7 percent, 11.6 percent and 16.2 percent. China’s rapid growth is helped by Viet Nam’s significant trade links with China and the fact that Chinese importers are generally less stringent in terms of the product requirements than they are with the US and EU28 markets, though each present their own set of difficulties. Meanwhile, sales to the ASEAN bloc rose by 37.7 percent in the first half of 2018 compared with the same period in 2017, led by Thailand, Singapore and the Philippines. The United Arab Emirates was another notable growth market, registering a 130 percent increase to reach USD 27 million.

Vietnamese farmed pangasius production is forecast to reach around 1.3 million tonnes in 2018, but growth potential over the next two years or so is expected to be limited. Fingerling quality is reportedly low and mortalities are high, which will affect future output and possibly contribute to further price rises. Progress is being made in addressing disease concerns, as a large-scale vaccination program is underway that will potentially reduce dependence on antibiotics. On the market side, the pangasius industry is pursuing a more coordinated marketing strategy at the national level, funded jointly by some 20 Vietnamese pangasius exporters, with the primary goal of improving the image of the species abroad. 

United States of America

Anti-dumping duties of USD 3.87–7.74 per kg, depending on the specific exporter, remain a major obstacle to the importation of Vietnamese pangasius into the United States of America. The high prevailing prices are another factor reducing the appeal of the species from a buyer’s perspective and volumes have fallen this year even as the total value rose. Viet Nam’s access to the US market is set to become easier, after the Food Safety Inspection Service (FSIS) of the United States Department of Agriculture (USDA) announced the completion of on-site food safety inspections in Viet Nam in midSeptember. All pangasius products will be subject to re-inspection at points of entry. The regulatory responsibility for ensuring standards for products derived from Siluriformes (catfish) was transferred to the USDA from the Food and Drug administration (FDA) in 2017.

China

China’s rapidly growing share of the global pangasius market reflects both a fast-maturing seafood market and insufficient domestic production levels. Growing demand for a widening variety of whitefish products is a prominent trend with broader expansion of the seafood market within China. The versatility of pangasius and the extensive trade links between China and Viet Nam ensures its appeal. Chinese buyers’ popularity with Vietnamese exporters is also
due to their relatively less stringent requirements and their willingness to compete with EU28 and US importers even as prices reach extreme heights. However, as Vietnamese producers are aware, various risks remain, because Chinese requirements may tighten in line with consumer preferences and the market’s supply from domestic sources may increase.

European Union (Member Organization)

EU28 imports of pangasius continue a decade-long downward trend with a decrease in volume to 35 600 tonnes imported in the first half of 2018, about 13 percent less than last year during the same period. Due to a significantly higher average price, the drop in value was only 9 percent. The spiking prices may be exaggerating the extent of any weakening in underlying demand. Around 98 percent of the pangasius absorbed by the EU28 market is produced in Viet Nam, whose marketers have struggled with the long-lasting effect of negative media coverage.

Other markets

Latin American markets have been losing the battle for increasingly expensive pangasius on the global market. After strong volume growth over the last few years, imports in the first half of 2018 fell back significantly. For the largest three Latin American markets of Mexico, Brazil and Colombia, VASEP reported a decrease of 13 percent in volume for the latter period, while the drop in volume terms was around 24 percent.

Outlook

Flat or minimal growth in Viet Nam’s pangasius output over the next 2 years will be offset to some extent by growth in other producing countries such as India, according to survey respondents at the recent Global Outlook for Aquaculture Outlook (GOAL) event. However, Viet Nam is by far the dominant exporter and the relative lack of Vietnamese supply combined with the pace of growth in China and the ASEAN region is likely to maintain prices at a relatively high level for the foreseeable future. If there is some shock to consumer demand in China, or a tightening of import requirements by Chinese authorities, the effect on market stability could be significant.