Seafood exports to hit US$6.2 billion in 2012

Outstanding problems exposing to fish production and export in Q.II/2012 continued to affect to fishery sector in Q.III/2012. Those are lack of capital for producing, processing to export; reduction in seafood exports to EU, Japan’s Ethoxyquin test, hiking input costs. Shrimp and pangasius exports declined for the third month in a row, making total seafood export turnover of Q.III/2012 increase slightly by 3.4 percent over that of Q.II/2012 but fell by 5.3 percent to US$1.62 billion over Q.III/2011.

After growing positively in Q.II/2012, marine fish exports had signs of slowing down in Q.III/2012. Cephalopod exports fell for the third month in a row due to shortage of raw material for processing. Tuna and marine finfish shipment strongly surged by 92 percent and 24 percent, respectively over the corresponding time of 2011; however, cephalopod exports dropped by 17 percent which led to a 19 percent growth in marine product exports of Q.III/2012 after a 50 percent advance in Q.II/2012.

Accounting for 64.8 percent of total seafood exports in the first 9 months of 2012, shrimp and pangasius exports in Q.III/2012 sank 15.2 percent and 10 percent respectively and reported the reduction of 3.9 percent and 1.8 percent in Jan-Sep 2012. Thus, total seafood exports in Jan-Sep 2012 reached US$4.5 billion, up only 4.3 percent compared to the same period of 2011.

In the wake of lack of capital for producing, low demand from consuming markets, increasing input costs and strict regulations and complicated procedures on seafood imports and exports, total seafood exports in Q.IV/2012 are expected to reach over US$1.67 billion. The figure is up 3 percent over that of Q.III/2012 but down 5.7 percent over that of Q.IV/2011 in which shrimp sales gained US$650 million, pangasius sales reached US$470 million and marine product exports touched over US$550 million.

Total seafood exports in the whole 2012 are forecasted to reach over US$6.18 billion, up nearly 1 percent over 2011 in which shrimp exports obtained US$2.2 billion, down 8.3 percent from 2011; pangasius sales reached US$1.8 billion, equally to 2011; marine product sales reached nearly US$2.2 billion, up 19 percent from 2011.

Fish farmers and enterprises continue to encounter lack of capital

Although bank’s interest rates shrank to 11 percent and some banks accepted to reschedule debts for shrimp and pangasius farmers, players in the fishery industry still meet with persistent difficulties in capital. Fish farmers and enterprises find it hard to access to bank’s loans because banks consider the industry as a risky one and they hesitate to offer loans to players in the industry. Debt rescheduling cannot save farmers from their losses due to surging costs for production, instable price of fish caused by turbulence in importing markets.

Incentive and supportive measures from relevant authorities such as offering low interest rate loans and additional loans, debt rescheduling only benefited major enterprises, many medium and small scale enterprises cannot access to bank’s low interest rate loans because they cannot meet requirements from banks. The requirements are that borrowers must be free with bad debt, submit their effective business plans and own worth assets for a mortgage.

Supply of raw material for processing

Demand for fish products from consumer markets has not been rebounded strongly. Therefore, production of shrimp and pangasius in Q.IV/2012 combined with inventories in Q.III can ensure raw material for seafood companies to process and export until the end of the year. Shrimp aquaculture is predicted to decrease by 20 percent from that in the corresponding time of last year; but this will be enough for processing as the result of weak consumption in the EU and difficulties in shrimp export to Japan.

Weather conditions is predicted to be unfavorable in the last three months of this year. This leads to lower landings of marine fish and lack of 30 percent of raw material, mainly cephalopod species, for processing to export. Tuna catches will also fall to lower level compared to that in the first half of the year.

30 percent rise in fish import for processing

To deal with low supply of raw material - particularly marine fish - in domestic market, Vietnam seafood processing companies keep purchasing more fish from other countries to realize contract with foreign partners or further process to export. This helps remaining jobs for local workers and brings higher revenue to Vietnam fishery industry. In the fourth quarter of 2012, import of marine fish into Vietnam for processing will increase by 30 percent as foreign buyers are showing strong demand for these products to satisfy consumption in the upcoming holidays. Vietnamese companies may pay averagely US$65 – 70 million for imported fish per month.

Static demand from main importing markets

The EU: As the European economy is considered to remain gloomy till the end of 2012, demand for seafood from the region will get the downtrend in the fourth quarter. Fish sales to the EU may reach US$280 – 290 million, down 12 – 15 percent over the same quarter in 2011. Pangasius and shrimp products continue to see decline in sales; while tuna and other marine fish will be potential export items to the market.

The U.S.: The U.S. had great growth in fish and seafood import from Vietnam in the first months of the year. However, purchases began sliding down in Q.III/2012 and this maybe last in the remaining quarter. Vietnam expects total revenue of US$330 million, equal to that of Q.III/2012 but sliding a bit from Q.IV/2011.

Japan: Ethoxyquin testing still put negative impacts on Japanese imports of shrimp from Vietnam. Between October and December, revenue from seafood products to Japan will stand at US$280 million, down 1.5 – 2 percent compared to that in October – December 2011, and remaining the same level of Q.III/2012.

Consumption demands from other Asian markets like China, South Korea and ASEAN are predicted to get higher in the remaining three months of 2012. Export of seafood to these countries will touch growth of 10 – 20 percent over the same time in 2011.

According to Report on Vietnam Seafood export in Q.III/2012