Vietnam – a leading country that supplies pangasius still maintains stable production and export activities because of good control of Covid-19 from the Government. However, exporters are unavoidable to be affected by the pandemic, weak demand in the US, Europe and measures of tightening import in China. Pangasius farmers in the Mekong Delta are more careful in stocking since 2019 to deal with the fall of raw fish price.
Indeed, from the beginning to the end of the year 2020, the price of raw fish depreciated continuously, the farmers lost from 3,500 VND/kg (0.15 USD) – 5,000 VND/kg (0.22 USD). Many farming households changed their investment method, focus on increasing vertical added value of the supply chain instead of the contribution of infrastructure. In some moments of depreciation, the farmers had to reduce animal feed to wait for the recovery of the market.
In the “neighboured” market-China, the pangasius industry is developing and enterprises in this country are trying to expand their influence in the domestic market to reduce the imported amount from Vietnam. However, because of the impact of Covid-19 in 2020, farming activities went slowly, broodstock had low quality, weather is unfavorable, standards for farming and processing is inconsistency, lack of experience so by the end of the year Chinese pangasius producers and other suppliers still in the struggle to maintain a profit.
The trade of Vietnamese pangasius went up and down according to Covid-19
In 2020, the 02 largest import market of Vietnamese pangasius: the US and China were still going down despite a positive sign in the 2nd quarter,2020. At that time, there was a sign showing the recovery in the US as their inventory decreased gradually, the busy trade came back to China. A strong decline of the economy in both major import markets of pangasius in the first half of 2020 created a nagative influence on the trade of Vietnamese pangasius. The demand has no increase leading to an increase in inventory, Vietnamese pangasius exporters face many difficulties.
In the last half of 2020, consumers were still wary of eating in restaurants, hotels despite social isolation measures leading to low consumption of pangasius in these places. In the UK, chains of Takeaway or Fastfood – one of the important consumption channel in Europe has reduced their buying. At the same time, cooking at home became more popular, this promoted retail of ready-to-cook products and home delivery. E-commerce is more and more important and is a special channel for receiving and distributing seafood in Asia. For the pangasius industry in Vietnam, exporters and farmers lost due to low price, tightened profit so added-value products are more concerned. Pangasius processors also focus more on the domestic market because they figure out the poor prospect in major markets.
Vietnam’s exports to the 10 largest export markets decreased significantly in value in the first half of 2020. Exports to the US increased rapidly in the 3rd quarter of 2020 but the delay of reopening in many states after social isolation slowed down the recovery of Vietnamese pangasius to the US.
A year of pangasius – depreciation
In the first half of 2020, the average price of Vietnam’s frozen fillet pangasius had no sign of recovery, at 2 USD/kg (FOB). The price of raw pangasius decreased significantly, fluctuates from 17,500 VND/kg (0.76 USD) to 19,000 VND/kg (0.82 USD).
What can be seen from the production and trade activities of the two major pangasius suppliers in 2020? That is the pangasius industry in this year focused on strategies to minimize damage, diversify markets, products as well as be more careful in growth targets and new stocking. In 2021, instead of expanding capacity, the exporters may focus on research and development (R&D), increase added value and improve the efficiency of investment. After Covid-19, retail and home-cooking may be a new trend even when the demand for food services increases as well as the demand for import of countries increase, too.