Vietnam Fishery Products Shrimp Report 2007

Report Highlights:

The fisheries sector plays an important role in the national economy, accounting for about 6.1 percent of Gross Domestic Product (GDP) in 2006 and earning almost $3.4 billion in export revenues. Total aquatic production increased almost 7% in 2006, while aquaculture production increased 14.6%. A strong export market continues to drive production, which is expected to reach 3.8 million metric tons in 2007. Exports are expected to reach $3.6 billion in 2007.

Situation and Outlook

Vietnam, with a coastline of over 3,260 kilometers (km) and more than 3,000 islands and islets scattered offshore, plus up to 2,860 rivers and estuaries, has been geographically endowed with ideal conditions for the thriving fishery sector which currently exists. For centuries, the Mekong River Delta in the south and the Red River Delta in the north have been used for wild catch fishing as well as extensive fish farming. The Mekong River Delta, one of the most productive fishery zones, covers an area of about 40,000 square km. In addition, there are about 4,200 square km of rivers, lakes and other natural bodies of water further inland, which swell to an additional 6,000 square km during periods of seasonal flooding.

The fisheries sector plays an important role in the national economy, accounting for about 6.1 percent of Gross Domestic Product (GDP) in 2006 and earning almost $3.4 billion in export revenues. Production in the fisheries sector grew at an average rate of 10.51% from 1991 to 2000, and 12.14% from 2001 to 2005. Much of this growth in production can be attributed to continued expansion in aquaculture, which increased from a 26 percent share of the sector in 2000 to 46 percent in 2006. A strong export market is the driving force behind the growth in aquaculture, but there is also a growing domestic market as incomes improve and local demand increases.

The bulk of Vietnam’s fishery exports are bound for Japan, Taiwan, South Korea, Hong Kong, the United States and the European Union. With a sixteen-fold increase in fishery exports since the 1990’s, Vietnam now ranks among the top ten seafood exporters in the world.

Industry targets for 2007 include total production output of 3.8 million metric tons, 2 million of which will be caught aquatic products, and 1.8 million being aquaculture. Increases in shrimp and catfish may only be minimal due to stresses on the environment as well as expected lower rainfall. Fisheries export target for 2007 is set at $3.6 billion.

Production

Over the past six years Vietnam’s fisheries sector experienced rapid growth, increasing more than 64 percent since 2000 and earning Vietnam the rank of fifth largest producer of fishery products globally, after China, India, Indonesia and the Philippines. The fisheries sector plays an important role in Vietnam’s national economy, where it accounted for just over 6 percent of total GDP and 19.3 percent of agriculture, fish and forest products’ contribution in 2006.

Vietnam produced a total of 3,695.9 thousand metric tons (TMT) of aquatic products in 2006. Of this amount, 2,001.7 TMT or 54.2% was wild-caught (marine and inland) and 1,694.3 TMT or 45.8% was farm-raised. Marine landings can roughly be divided into three categories: high value species for export, medium value species for domestic consumption, and low value species for fishmeal for the animal feed industry. Although marine landings still have the larger share of production, aquaculture has been growing at a much faster rate, having increased over 187.4% since 2000 at an average growth rate of 19.3% per year. Fish had the largest share of production of either farming method, accounting for 74.1% of marine landings and 67.8% of aquaculture in 2006. The bulk of shrimp production was done by aquaculture, which produced 77.2% of Vietnam’s shrimp in 2006.

Wild Catch

Marine

Marine fishing in Vietnam is mostly done by small craft, near or around coastal areas. Signs of stress due to overexploitation are becoming evident in these areas, where several species are now seriously over-fished. To stem the tide, Vietnam has implemented such measures as the coastal fisheries restructure policy, which seeks to promote more off-shore fishing and aquaculture as well as occupation shifts to other fields, such as trading, logistics, tourism, and entertainment services. Offshore fishing generally occurs in depths of 30 meters or more in the waters of the Gulf of Tonkin and the Gulf of Thailand and depths of 50 meters or more in the waters off Central Vietnam. Offshore fishing currently accounts for about 34 to 40 percent of total wild catch.

Of the more than 2,000 fish species in the waters off Vietnam, 130 species have been identified for economic exploitation. The latest evaluation estimates total marine fish stock at 4.2 million tons. Annual allowable catch is set at 1.7 million tons, which includes 850,000 tons of demersal fish, 700,000 tons of small pelagic fish and 120,000 tons of oceanographic pelagic fish. In addition to marine fish, there are some 1,600 species of crustaceans (marine shrimps, lobsters, slipper lobsters, crabs, mud crabs, etc.) of which 50,000-60,000 tons may be caught each year. There are also over 2,500 species of mollusks (squids and octopus) for which the allowable catch each year is 60,000-70,000 tons.

Freshwater catch (Inland fishing)

Total inland catch ranges from about 200,000 - 250,000 tons per year and offers key sources of subsistence food for local consumption as well as other valuable products. Vietnam has over 200,000 ha of lakes, most of which are man-made reservoirs, with only 10% being natural lakes. Total catch from lakes is estimated at about 9,000 tons a year, with 4,000 tons coming from natural lakes and 5,000 tons from reservoirs. Seasonal flooding also contributes to annual freshwater production. During the rainy season in the Mekong Delta numerous pools of flooded land, some as large as 140,000 ha (in Dong Thap Muoi) and 218,000 ha (in Long Xuyen Quadrangle Areas) abound. These pools are ideal places for fishing in the rainy season when many fish species migrate from the Mekong River system. In just these two flooded areas alone over 20,000 tons of fish are caught each year.

The fish resources in the rivers of the North and Central Vietnam have been over-fished due to a lack of protection measures. The interlacing channel system in the South produces a significant quantity of freshwater fish. About 30,000 tons of commercial catch comes from the Mekong River each year.

Aquaculture

Aquaculture has made significant progress in Vietnam in recent years, increasing in market share from 26.2% of total fisheries’ production in 2000 to an estimated 46% in 2006. This development can be attributed to a concerted effort to not only expand the production area but also improve production techniques. Specifically, focus was given to developing cultures of local species, improving the efficiency of growing methods, and developing areas for intensive aquaculture farming.

Vietnam’s aquaculture uses marine, brackish and fresh waters, all of which are widely available throughout much of the country. In 2006, the total area of water surface used for aquaculture in Vietnam was 1,050 thousand ha, which represents a 64% enlargement over the 641.9 thousand ha used in 2000. A variety of species are cultivated in these waters, but shrimp and catfish are by far the most prevalent.

Freshwater culture

Small ponds, seasonal flooded areas, lakes and low-lying paddy fields are the typical areas for fresh-water cultures. In these areas such fish species as grass carp, common carp, mud carp, silver carp, common silver barb, tilapia, catfish and crossbred catfish are raised. Highvalue targeted species such as “tra”, “basa” catfish, tilapia, grass carp, hybrid carp and rohu are raised in cages in rivers, streams and reservoirs. Low-lying paddy fields and flooded areas are favored for rearing shrimp and giant river prawns. Crop rotation and intercropping of fish and shrimp in paddy fields has proved beneficial to crop restructuring as well as improved outputs and incomes. Typically 1ha of pond culture yields about 3 tons of “tra” catfish, but with advanced techniques it may yield up to 300 tons/ha per year.

River Catfish (Pangasianodon hypophthalmus) is the most popular freshwater culture fish. Production of river catfish has been increasing at a rapid rate as more and more farmers respond to growing international demand. Total annual production increased from 400,000 mts in 2004 to 600,000 mts in 2005 and a record 800,000 mts in 2006. Output for 2007 is projected to increase to a new record of 1 million mt.

Brackish-water culture

Brackish-water aquaculture farming entails hatching and rearing aquatic species whose final growth stage takes place in brackish water. Cultured species include shrimp, sea perch, grouper and conger. Popular production methods are mono cropping one species, intercropping among various species, crop rotation or culture of fish in mangrove forests. Organic shrimp farming practices (raising shrimp in essentially natural conditions without using chemicals, antibiotics, and stimulants) has been recently introduced in the Mekong River Delta.

Marine Culture

Marine aquaculture farming entails hatching and raising aquatic species whose final growth stage takes place in marine waters. Vietnam’s primary marine culture species are shrimp, lobster, marine fish (grouper, cobia, snapper, sea bream and trevally) and mollusks (clam, granular ark, areola Babylon and pearl oysters). In Vietnam, marine aquaculture is farmed mainly in cages and rafts submerged in marine waters along the coastline and in tidal areas. The growth potential for this faming method is enormous, given Vietnam’s extensive coastline. Great strides have already been made with several species (e.g. lobsters, cobia, grouper and pearl oysters) and efforts are underway to expand this type of aquaculture farming. One such effort is the expansion of the marine production area through the use of waterproof materials to cover sandy and marshy land deemed unfit for other agricultural activities.

Seed production system

Vietnam is able to artificially produce seeds for most of its traditional freshwater cultured species and is therefore able to meet most of the seed demand of its aquaculture industry. Available data indicate that in 2001, there were 447 hatcheries with an overall production level of 7.987 million seeds. Undoubtedly seed production capacity and output have grown since then. Vietnam also imported a number of high-value species such as silver pomfret, monosex tilapia, hybrid carp and red drum for trial culture. Attempts have also been made in hatching and spawning rare and high-valued fish such as yellow mystus, and conger as well as marine varieties such as cobia and grouper.

Fish seed production technology in hatchery was developed in the 1970's for the river catfish of the Mekong Delta, which until then had been cultured by small-scale traditional methods. Once the river catfish was introduced to the international market, demand for seedling soared and numerous catfish hatcheries were established in the Mekong Delta. Well over a billion fingerlings have been produced, and current concerns now focus on improving seed quality.

The giant tiger prawn artificial seed supply has been less than satisfactory, both in terms of quantity and quality, which is reportedly deficient due to a lack of high quality, disease-free brood stock. Latest available data from 2001 indicate that there were 4,077 giant tiger prawn hatcheries then, with an annual production of about 16 billion shrimp seeds.

Aquatic feed

Reports are that the aquatic feed industry is scrambling to keep pace with increased demand for commercially made feed from the booming aquaculture industry in the Mekong Delta. Latest available statistics indicate that Vietnam’s 39 industrial aquatic feed producers in 2001 had a production capacity of about 50,000 tons per year. This would only satisfy about 40% of today’s aquaculture feed demand. More and more the trend among farmers is to replace traditional home-made feed with industrial feed, hence the higher demand for industrial fish feed. Many feed companies now have plans to install additional production lines to increase productivity. Also under consideration is the possibility of including better efficiencies of feed formulations and the development of substitute grain-based feeds. Cargill Vietnam opened a new aqua feed factory in March 2007, with a capacity of 60,000 MT of feed product per year.

Fleet

Reports are that Vietnam has been increasing its fishing fleet for offshore fishing. Latest available statistics indicate a 106 percent increase in fleet size from 2000 to 2005, for a total fleet of 20,118 boats, with total capacity of 2,923.8 HP. Most boats in the fleet are said to be privately owned and state fisheries activities are reportedly waning. The total number of fishing boats, nationwide, is estimated at 96,000. However, many of these boats are equipped with very rudimentary machines and preservation technologies often include chemicals that lead to food safety issues for consumers.

According to Vietnam’s master plan for the fisheries sector, by 2010, the fishing fleet should total 50,000 vessels. Of this number, 6,000 vessels will have engine power of 75 HP or greater; 14,000 vessels will have engine power of 46-75 HP; 20,000 vessels will have engine power of 21-45 HP and 10,000 vessels will have engine power of 20 HP or less.

Fishery Processing

Vietnam reportedly has 470 seafood processing plants, 296 of which produce frozen seafood products, 32 produce preserved, dry seafood products, 9 produce canned seafood products and 17 plants produce fish meal for the animal feed industry. Seventy percent of these plants are located in southern Vietnam, 24 percent are in central Vietnam and 6 perc ent are in the North. About 246 plants are qualified to export to the European Union, and over 200 plants operate under the HACCP system. Several previously state-owned plants have converted to joint stock companies or other non-state ownership structure. State-owned plants are mainly engaged in packing marine-caught shrimp, squid and cuttlefish, all of which is exported. The private fish canning factories are engaged chiefly in processing farmed shrimps for export.

Domestic processing and consumption of aquatic products have increased in recent years as the domestic industry benefited from development advances in the cold storage industry. Previously, all processed seafood for domestic consumption was imported and few could afford it. Today, several plants focus on processing for the domestic market, which now consume a wide variety of fishery products. Many plants also focus on processing for the export market. The latest available data show 272 plants in 2001 specialized in exportoriented processing, with an annual input requirement of 500,000 tons/year.

Vietnam’s seafood/fishery industry has invested heavily into improving technologies and preparing for international trade. Many of the larger plants have acquired the food safety certifications of their major trading partners, and some have been applying product quality controls like HACCP, GMP and SSOP. Still, there persist a number of processing plants with food safety and environmental pollution problems.

The industry employs such advanced technologies as post-harvest preservation, surimi production, winter-sleep (hibernation), and individual quick-freezing (IQF) in its export processing plants. All processing plants reportedly have at least one cold storage and cool storage to preserve products before processing. Vietnam currently has 643 cold storages and 146 cool storages.

Master Plan for Development of the Fisheries Sector through 2010

On January 11, 2006, the Prime Minister approved Decision No. 10/2006/QD-TTg on the Master Plan for development of the fisheries sector through 2010. Two key goals of the plan are to maintain an average production growth rate of 3.8% per year and an average growth in export value of 10.63% per year. The goal for production output is set at 3.5 to 4 million metric tons per year, of which cultured aquatic production should be about 2 million metric tons and marine caught products should be at least 1.5-1.8 million tons. An ultimate goal of this Plan is to achieve export earnings of $4.0 to 4.5 billion for this sector.

Trade

Exports

Vietnam’s fishery product exports have increased considerably since 2000 to become a major income earner and one of Vietnam’s major export commodities. Aquatic exports earned over $1 billion in 2000, $ 2.2 billion in 2003 and $3.36 billion in 2006. Total export volume for 2006 was 811.5 thousand metric tons, a 29.4% increase over 2005. Catfish and shrimp are by far the largest share of aquatic exports, accounting for over 22% and 44%, respectively, of total export earnings in 2006. Currently Vietnam exports fishery products to over 75 countries and territories on five continents. Japan and the United States are the two largest export destinations, by country, while European Union nations, as a group, had the largest share of exports by volume and the second largest share by value in 2006. Exports are projected to reach $3.6 billion in 2007. Figures for the first quarter of 2007 indicate an increase of 20.4 percent in exports over the same period in 2006.

Vietnam's Primary Fishery Export Products in 2006
(value basis)

Vietnam's Fishery Products Export Market, 2006
(value basis)

In 2003, Vietnam’s fishery exports to the United States soared to $730.7 million, increasing 18.4 percent over the previous year. In 2004 exports were much reduced as a result of U.S. anti-dumping actions against Vietnam. Since then Vietnam’s fishery exports to the United States have been increasing, though at a somewhat less rapid pace. Fishery exports to the United States in 2006 were valued at $651.8 million, a 3.7 percent increase over the previous year. Shrimp exports of 35,414 metric tons accounted for over 65.9% of this amount.

High drug residue levels have also been a factor in the reduction in Vietnam’s fishery exports to the United States. Vietnam’s seafood industry has been working with the U.S. Food and Drug Administration and Vietnam’s Ministry of Fisheries to remedy this. Significant progress has been made in reducing residue levels over the past year and the effort continues.

Imports

Vietnam, even as a major seafood exporting country, must import some live and processed fishery products for use in its export industry and for domestic consumption. In 2006, Vietnam imported fish and fishery products valued at $95.8 million, up 16.2 percent from 2005. In just the first four months of 2007, fisheries imports totaled $70.6 million, which is 73.7% of the total for 2006. This suggests that imports will have a sharp increase in 2007. Strong demand from the domestic market and the processing industry, particularly for fish and crustaceans is believed to be driving the rise in imports. Much of the increase in domestic demand comes from the hotel and restaurant industry as well as supermarkets.

Vietnam imports fish and fishery products from a variety of sources. China, Thailand, Indonesia, Taiwan and Malaysia provide most live fish for ornamental gardens and breeding, while live salmon is imported from Norway and the United States. Fresh, chilled and frozen fish, imported for domestic consumption, is imported from Japan, New Zealand, Australia, Norway and other countries. Vietnam also imports crustaceans (shrimp, crabs) for breeding and processing; black tiger shrimps are imported from China, Singapore and the United States for breeding, while shrimp and shrimp products for processing are usually imported from China and India.

In 2006, Vietnam imported over 10.3% of its fishery product imports from the United States. Whole or eviscerated salmon was the largest single fish import, and accounted for 42.1% of Vietnam’s total fishery imports from the United States.

Consumption

Fishery products are a major source of protein for people in Vietnam. On average, Vietnamese get about half their dietary protein from different types of aquatic products. With the rapid growth and improvement in Vietnam’s economy in recent years, per capita income has increased considerably. From 2000 to 2006, per capita income rose 80.8% to $687, thus providing consumers with greater buying power. With improved incomes, diets also improve and more protein-rich food is consumed. The results of surveys on Vietnamese households’ living standards (VHLS) conducted by Vietnam’s General Statistics Office in 2002 and 2004 support the claim of increased consumption of seafood per capita. Consumption of fish and seafood increased much more than any of the other sources of protein.

Policy

Vietnam’s Seafood Import Requirements

Imported fishery products must be registered and tested for quality and safety in compliance with the Prime Minister’s Decision No. 50/2006/QD-TTg of March 7, 2006. Only imported consignments with health certificates issued by the National Fisheries Quality Assurance and Veterinary Directorate (NAFIQAVED) or its branches may be further processed or placed on the market. The Decision provides an updated list of imported and domestic products subject to inspection by authorized bodies (including technical institutions appointed by the Ministry of Science and Technology). Fodder for aquaculture and aquaculture products (e.g. shellfish) are among the goods subject to quality control. The Decision also provides standards for microbiology and chemical tolerances and testing methods.

The Ministry of Health’s Decision No. 867/1998/QDD-BYT, dated April 4,1998, offers a list of microbiological criteria limitations for fishery products.

As of March 10, 2007, all companies allowed to export fishery products to Canada and the United States no longer need to obtain quality control certificates from NAFIQAVED. Shipments will continue to be tested, however, in accordance with the requirements of importing countries.

Other Industry Activities

• Two more Vietnamese seafood exporters were granted international food safety certificates by the Global Aquaculture Alliance (GAA). Sao Ta Foods and Viet Hai Seafood now join the six other seafood companies in Vietnam that have received GAA’s Best Aquaculture Practices (BAP) certification. The GAA is a non-profit trade association dedicated to ensuring responsible fish and shellfish farming and conservation of environmental and social resources. Presently, BAP is only applied to shrimp products. It standardizes hygiene and products’ sources of origin. Once certified, businesses are permitted to use the BAP stamp on packaging and in advertisements of their products.
  
  
• CATFISH 2007, the first-ever global conference on the catfish farming industry, was held in conjunction with VIETFISH 2007, the Vietnam Fisheries’ International Exhibition, held in June 2007 in Ho Chi Minh City (HCMC). These events were platforms to explore business opportunities and expand business networks, while learning about the catfish industry and Vietnam’s tra/basa species. Vietnam Association of Seafood Exporters and Producers (VASEP) arranged a field trip to a catfish farming center and processing plant near HCMC, which offered participants an opportunity to observe and experience this dynamic and bustling industry. VIETFISH 2007, at the HCMC International Exhibition and Convention Center, attracted participants from around the world with 200-300 booths of local and overseas companies.

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