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Is the Golden Age for Vietnamese Tra Over?

Marketing Economics +2 more

VIET NAM - Tra (Vietnamese catfish) farmers in the Mekong River Delta are miserable because fish prices have been sliding continuously even while fish production is decreasing.

First-class tra fish is now selling at 14,500 dong per kilogramme of unprocessed fish, while second-class fish fetch 12-14,000 dong per kilogramme, a sharp fall of 1,800 dong per kilogramme since May, reports VietnamNet.

It is quite a surprise to the industry that the price is sliding now, when tra fish output is low and workshops are complaining they do not have fish to process.

Tra production has been decreasing dramatically as a lot of fish farmers have given up after they incurred heavy losses in 2008. It is estimated that the fish farming pond area has decreased by 30 per cent over the same period of the last year.

In fact, according to a farmer in Dong Thap province, many farmers resumed farming the tasty freshwater fish earlier this year after they heard that the Government was trying to revive the industry. However, farmers have once again incurred losses. While fish prices have been falling, feed prices have soared by 20 per cent to about 7500 dong per kilogramme.

Meanwhile, seafood processing workshops are setting higher requirements for fish quality. They only purchase fish of 800 to 900 grams’ weight, which means that farmers lose 30-35 per cent of their income from sub-standard fish.

Fish farmers say that to produce a kilogramme of tra fish, it costs them 14,500 dong (about 90 US cents). Just to break even, they must recover the cost of production loans as well.

Tra export markets are saturated

In the first five months of 2009, Vietnam exported nearly 400,000 tonnes of seafood products of all kinds, with total turnover of $1.369 billion dong, about 10 per cent below last year’s rate. (Total Vietnamese seafood export turnover was $4.5 billion for all of 2008).

The Secretary General of the Vietnam Association of Seafood Exporters and Producers (VASEP), Truong Dinh Hoe,noted that in previous years, foreign importers began importing seafood products from June onwards to prepare for the Christmas and New Year holidays. However, they have not made deals this year, simply because they still cannot see the purchasing power recovering and because banks in the import countries have reduced lending to fund seafood imports.

Tra exporters in the Mekong Delta say that after the Brussels seafood trade fair, where Vietnam offered tra fish at $3 per kilogramme for processed filets, tra fish export markets have become saturated, while importing countries are trying to cut down imports.

Analysts say that the tra fish production has been developing more rapidly than the market development. The growth of exports to the Russian market has slowed down, while new American farm legislation aims to limit imports. Other markets, including Egypt, the Middle East, Italy and Spain now also tend to erect barriers to Vietnam’s tra fish exports.

However, the analysts emphasize that Vietnam’s tra fish, delicious and cheap, has potential for further market growth. Vietnamese exporters are trying to conquer new markets, namely Africa, Brazil and Mexico.