Pangasius sector needs mid-term bank loans

Pangasius producing and exporting sector is now in the list of risky trade sectors, particularly after bad news on some pangasius exporters’ bankruptcy, the banks are increasingly tighten their credit. This caused more difficulties for enterprises to turn over the capital for remaining their production.

They also faced soaring input costs and hiking fees for safety and hygiene tests on exported consignments, complicated and time-consuming administrative procedures. The ebbs and flows of pangasius raw price leading to the fact that many farmers don’t dare to continue restocking.

Some enterprises didn’t operate at their full capacity and some of them must down fish price to release inventory products. In the first 5 months of 2012, pangasius exports were unsmooth but still grew over that of the same period of 2011 with export volume of 69,673 MT (up 22.3 percent) and export value of  US$193.5 million (up 18.8 percent). Exports to some traditional markets of local fish exporters continued to grow such as the U.S (up 11.8 percent), Brazil (up five-fold), Colombia (up 124 percent).

However, exports to EU market were gloomy, weak purchasing power, leading to a 19.1 percent reduction in export value over 2011. Over 64.5 percent of fish farming area in Dong Thap province belongs to processors, they have high farming techniques, experiences in managing farming area and can make sure food safety and hygiene standards. Local fish farmers are increasingly paying attention to fish quality, applying international standards in farming such as GAP, GlobalGAP, VietGAP to produce the premium products and raise their competitiveness in international markets.

As of mid-June 2012, fish farming area in the province reached 1,263 hectares, completing 58.04 percent of annual plan and up 14.33 percent from that of the same period of 2011 in which farming area was 764 hectares and harvesting area was 499.5 hectares. Harvested output of fish in locality reached 178,850 MT, up 7.86 percent from that of the same period of 2011.

In the first 3 months of 2012, trading of raw fish in Dong Thap was favourable. Fish farmers earned profit as fish price was fairly high from VND26,500 – 28,500 per kilogram. However, since the late March, the price fluctuated in the range of VND20,500 – 21,000 per kilogram, even fell to under VND20,000 per kilogram.

The fluctuation in raw fish price takes away farmers’ profit. Rocketing interest rate from bank loans and high feed price are also exposing a lot of obstacles to farmers in Dong Thap province as well as Mekong Delta provinces.

Therefore, DARD of Dong Thap recommended MARD in coordination with Ministry of Industry and Trade (MOIT) to petition to the government so that fish processors, exporters and farmers can access to mid-term bank loans with low interest rate to speed up pangasius production and trade as well as submit MARD to consider to put pangasius sector into list of conditioned trade sectors. That means pangasius exporters must have their own processing facilities and fish farming area.