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Material Shortages Hinder Processing Workshops

Economics +1 more

VIET NAM - Seafood processing workshops in the Mekong Delta are complaining that the workshops cannot run at full capacity because they cannot collect enough materials for processing.

The shrimp and tra fish prices in Mekong Delta have increased significantly by one to two per cent in recent days. However, even if accepting to pay high prices, seafood companies still cannot collect enough materials.

Nguyen Phuong Dong, Deputy General Director of Nam Can Seafood Import-Export Company in Ca Mau province, told the Viet Nam News Agency that all the seafood processing companies in the province are struggling with the material shortage.

“The merchants, who collect shrimp from farmers to sell to seafood processing companies, all have raised the sale prices. However, since the supply is short, processing factories cannot run at full capacity, even when they accept to buy shrimp at high prices,” Mr Dong said.

The shrimp prices have increased sharply by 5000-10,000 dong per kilo. Merchants are selling shrimp at 165,000 dong per kilo (30 shrimp per kilo), and 116,000 dong per kilo (40 shrimp per kilo).

As for tra fish, the prices in An Giang province have increased by 1000-2000 dong per kilo. According to Do Xuan Mai from An Giang Province’s Fisheries Association, seafood companies are collecting tra fish at 17,800 dong per kilo, or 1500-2000 dong per kilo higher than previously.

Explaining the sharp price increases, analysts say the prices of feed used in aquaculture have increased significantly recently, thus making the production costs higher. Besides, the supply has become seriously short, because farmers, who incurred heavy losses in previous crops, have left fish ponds idle. In fact, many farmers still want to keep farming, but they cannot borrow capital from banks when they still cannot pay old debts.

However, Mr Mai believes that the tra fish price would not be higher than 18,000 dong per kilo, even though seafood processing companies are seriously lacking materials to fulfill export orders.

“In order to make one kilo of fillet fish, processors would need three kilogrammes of fish. Currently, they can get only three dollar (60,000 dong) for every kilogramme of fillet fish exported. Therefore, seafood companies will not pay higher to farmers. If they buy materials at overly high prices, they will not be able to make profit,” he said.