(TSVN) – In two consecutive years, the export of Vietnamese pangasius decreased continuously, especial is in 2020. When the markets are still under pressure of the Covid-19 pandemic and Vietnam’s pangasius lose gradually its unique position, finding an opportunity to boost the export of this industry is not easy. At the beginning of a new year, let’s look at the pangasius industry for a direction in the coming time.
Having difficulties in the whole last year
According to the report of VASEP, in 2020 the turnover of pangasius export achieved US$ 1.54 billion, decreasing by 23% compared to 2019. From March to September 2020 pangasius export decreased significantly from 17 – 35% over the previous same period. The pandemic has changed the consumption trend in the markets: the consumption capacity of services, restaurants, hotels has decreased; that one in supermarkets and retail chain has increased. The main consumption field of Vietnamese pangasius in the major markets services so it was affected significantly.
From October, the price of exported pangasius was more positive, its turnover increased compared to the previous months and decreased by only 5% over the last same period, and decreased slightly by 4% in November. However, the troubles have not been ended. For example, export to the largest market – China recovered in October 2020 but decreased sharply in November. According to VASEP, export to China in November decreased by 29.3 % compared to October. The reason is they had to wait for Chinese competent authorities to test Covid-19. Since Chinese agencies at the border gate applied the regulations on control, fumigation, traceability for 100% of frozen shipments at most major ports like Shanghai, Wuhan, Tianjin, Quingdao. The procedure for the Covid-19 test is complicated, customs clearance takes a month, the cost for storage and checking of goods is up to 2,000 – 3,000 USD/container.
In the difficult context of export, processing enterprises that changed their orientation to the domestic market are considered going the right way. Directorate of Fisheries said, the event “connect production-consumption of pangasius” in the framework of “A week of pangasius and seafood products in Ha Noi in 2020” had 8 links between enterprises signed. “It is an initial success in bringing pangasius to the North (Nam Viet, An Viet and Bac A companies). On October 30th, 2020, the Ministry of Agriculture and Rural Development cooperated with An Giang provincial people’s committee and Nam Viet JSC celebrated a ceremony to announce the export of pangasius products that produced by high technology for and serve for domestic consumption” (Summary report for 2020 of Directorate of Fisheries).
The advantage is decreasing
The pangasius industry was established and developed in the Mekong Delta, a land endowed with seafood with a coastline of 780 km and 22 large and small gates, nearly 80,000 hectares of tidal area, interlaced systems of the canal, and river, abundant water source. Natural alevin of basa fish and pangasius comes along with floodwater, they were caught for raising and reached out to the world in 1987, Australia was the first export market. By 1990, pangasius completely replaced basa fish and be a large processing industry from 2000, and Vietnam is a leading country of pangasius export for the past 20 years. Pangasius has been presenting in more than 130 countries, from the fastidious markets such as the US, the EU, Brazil, Australia, Canada to new markets like China.
In 2000, the farming area was 2,123 hectares with a productivity of 93,415 tons in consecutive 10 years. According to VASEP, only in five years (2015 – 2019), the farming area increased by 18.7%, productivity increased by 38.5%, export turnover increased by 28%. The Export turnover peaked in 2018 with US$ 2.26 billion but it decreased by 11% in 2019 with only over US$ 2 billion. In October and November 2018, the price of raw pangasius reached a record with 36,500 VND/kg, which is the highest price in the past 10 years. According to the Directorate of Fisheries, in 2020 the farming area of pangasius was 5,700 hectares, the productivity was 1,560,000 tons, the average yield was 273 tons/ hectares, the export turnover was US$ 1.54 billion.
Based on the data from VCCI Can Tho, there are about 100 production and processing factories of pangasius in the whole of Vietnam, mainly is in the Mekong Delta, which decreased significantly in number compared to 291 factories in 2011 but larger in scale.
However, this industry has been facing many challenges. Natural conditions are heavily affected by climate change, the riverbank is eroded, water flow and water quality are changed. The main export products are still fillet, segment or whole fish. The traditional farming method causes inconsistency of quality of raw materials.
There are many limitations revealed when analyzing each stage. For instance, the biggest obstacle of the farming stage is lacking high-quality pangasius breed, and breed production factories. The project “production of high-quality pangasius breed” which was deployed from March 2016 December 31st, 2020 by the Research Institute for Aquaculture II has provided high-quality pangasius broodstock but the lack of high-quality breed has not been ended yet. Small farming scale, limited technology cause high price.
Take advantage of the opportunity
“The annual economic report of the Mekong Delta in 2020” implemented by VCCI Can Tho in association with Fullbright School of Public Policy and Management: “In the current context of pangasius industry, it is a sustainable intention to change production model towards industrialization, modernization and standardization of farming process to meet the requirements of fastidious markets such as the US, the EU. This change is facing some difficulties: The scale of the farming area is small, the level and skill of farmers are limited; demand for investment capital is large; the presence of easygoing markets like the Middle East and China reduces the pressure of transition. There are positive signs: 5,368 pangasius ponds in the area of 4,692 hectares given identification code. BY the beginning of 2020, 303 VietGAP certificates were issued to pangasius farms in the area of 1,956 hectares. About 71% of 5,400 hectares of pangasius farming got the certification of GlobalGAP or ASC.
Analyzing the differences between the two typical enterprises of pangasius processing and export – Vinh Hoan and IDI, they have two directions of business from 2015 up to now. Vinh Hoan researched and produced collagen from 2014 and the profit from this has contributed about 20% of their total profit. IDI was known well as one of the leading enterprises of pangasius producing and processing for export with the main product is the fillet. Each direction has its advantages and disadvantages.
For this industry, Vietnam’s role and position are saturated and being competed fiercely by new competitors. Based on the statistic from the Directorate of Fisheries, Vietnam’s productivity of pangasius in 2018 accounted for about 45% of the whole world; Nowadays, many countries cultivate pangasius. In May 2019, Indonesia exported their first shipment to Saudi Arabia. China has 20 processing factories with a capacity of about 30,000 tons and is promoting farming and processing. India, Bangladesh are raising pangasius on a large scale and are competing fiercely with Vietnam.
It can be seen that the strength of our pangasius industry is mainly based on natural conditions, it has been exploiting for a long time and is being disadvantages, and no longer dominate the markets in the world, lack of skilled labor. However, there are some opportunities from FTAs and the fiscal space of upgrade has added-value.
“In such a context, the structure associated with natural conditions is more and more unfavorable and towards the most standard markets; research and develop the processing or finished products is the inevitable choice of this industry in the next stages. The plan for transformation and change must be clearer and more drastic during deployment and implementation”, from the conclusion of the Annual Economic Report of the Mekong Delta in 2020.