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Seafood Exporters Face Price Difficulties

Economics +1 more

VIET NAM - Vietnamese exporters of seafood are concerned because an increasing number of European and US importers are demanding lower prices or take for completed contracts. Analysts are also predicting a worse end of the year due to the economic crisis in Europe and USA.

While the demand drops, inventories increase export price of fish has fallen to Europe work another $0.02 to 0.03/kg in the first two weeks of August.

The average export price has fallen from $3.3 to 3.4/kg in June and July to $2.8 to 2.9/kg more recently.

Meanwhile, the average export price has dropped to $3.0/kg.

In fact, the decline in export prices was anticipated, because importers were well aware of the prices of raw materials Domestic declined 20 per cent since the beginning of the year and try to force prices down.

However, the decrease in price is not the biggest headache for Vietnamese exporters now.

The greatest concern now is that many importers are by terminating the contracts, while others are deferring deliveries.

"Some European importers reported the cancellation of contracts for the importation of fish work in the first two weeks of August, which indicates that they have no money to do the payments," said the head of a fish export company in the province of Dong Thap.

Thien Tran Linh, Phuoc Thuan Director Seafod and Trade Company in the city of Da Nang, said the current situation is similar to the 2008 crisis.

The debt crisis has forced commercial banks in Europe and US to reduce appropriations. Therefore, importing markets are reducing their imports.

Meanwhile, sales are very slow in the consumer market, because consumers now have to tighten their belts. "We are facing difficulties twofold: the export markets reduced, while input costs have increased," said Mr Linh.

On the other hand, the Russian government is implementing a series of measures to stabilise the prices of seafood in the domestic market, with more stringent conditions for reduce imports. In the first quarter of 2011, imports of seafood from Rudsia fell 32 per cent.

Analysts have warned that the new policy could have a big impact on fish exports from Viet Nam work.

To date, at least ten Vietnamese companies are licensed to export about 5000 t of fish work to Russia.

They warn that importers are insolvent according to Duong Ngoc Minh, Director General of the Hung Vuong Seafood Company, Vietnamese businesses should be careful and not try to export its products at any cost. He said that many importers are insolvent.