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Rich Potential for Tra Fish Exports

Sustainability Marketing Economics +4 more

VIET NAM - Tra fish exports can reach US$2 billion this year if the industry is given capital preference and annual interest rates fall below 15 per cent, according to the Viet Nam Association of Seafood Exporters and Producers (VASEP).

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"This year the tra fish industry has a significant opportunity," said VASEP's vice chairman Duong Ngoc Minh. "Tra fish exporters have established plans and targets for the year, but whether they succeed or not will depend heavily on Government policies."

He said domestic firms could take advantage of the silver lining to the global economic crisis: with good quality and reasonable prices, tra fish could now hope to compete with chicken, a cheap and favoured product in Europe. The cost of tra breeding food was expected to decline 15 per cent this year the fish has been recognised by the World Wide Fund for Nature as a sustainable aquatic product.

"This year, the Government will implement policies to stablise the macro-economy and hold inflation at 9 per cent. Banks will reduce interest rates right from the beginning of the year. These are all good conditions for enterprises to boost production," he added.

In addition, Mr Minh suggested that banks offer favourable lending conditions for tra fish breeders, producers and exporters, and that the Government cut down on administrative procedures in order to eliminate unnecessary costs for firms.

"If these two major matters are solved, we can absolutely be optimistic about tra fish exports this year," he said.

The association estimated that tra fish exports reached over 600,000 tonnes, up three per cent over the previous year. According to customs' statistics, tra fish export value attained last year was about $1.8 billion, a year-on-year increase of 26.5 per cent.

Frozen fillet was the main export product, accounting for 99 per cent of the total export value.

Import market structure saw almost no change last year, with the US and the European Union (EU) remaining the leading markets, representing a combined 47 per cent of Viet Nam's total tra fish export value last year. Fluctuation was only seen in some small groups of markets, possibly due to unstable demand here, VASEP said.

The US last year imported a fillet turnover of $331.6 million, an increase of 87.8 per cent over the previous year, with the market share here rising from 11 per cent to 18 per cent.

The EU market share fell from 37 per cent to nearly 30 per cent due to a 9.4 per cent decrease in Spain, the biggest tra fish consumer in the bloc.

Holland was the largest importer of processed tra products last year, importing $5.4 million and representing a market share of 38.8 per cent. Processed product exports to Egypt increased by a remarkable 350 per cent in 2011, though the nation still represented only a small market compared to others worldwide.

Last year, exports grew steadily thanks in part to the 230 tra fish exporters and major firms in Viet Nam with good supply capability, said the association.

Strong export growth last year was mainly due to prices, which increased continuously month-over-month. Prices were up notably from May to August and in October, posting an average year-on-year increase of 26 per cent during these periods.

The association attributed the price hike to material shortages, rising costs and high demand.

Raw fish prices reached a record high of VND29,000 ($1.4) per kilo in the last two months of 2011 and suddenly fell to VND25,000 in late December due to the public debt crisis in Europe. The association said it was a positive sign that raw material prices recovered gradually in mid-January to VND27,000-28,000 and continued to rise after Tet (Lunar New Year).

However, many enterprises supposed that the increases in material prices were not a result of market activity but rather due to supply shortages, especially for fish weighing 0.9-1.2 kg. The association said this situation only occurred partially in some localities.

Industry insiders forecast that fish prices would not increase in the long-term as breeders were facing financial difficulties and were worried about uncertainty on export markets.

VASEP noted that although tra fish export values increased significantly every year, added values remained marginal and profits accounted for only about one per cent of the total export values. Minh said this year many enterprises were eyeing new markets such as Mexico, Brazil, Chile and Peru.