Promote export of agricultural and fishery products after Covid-19: will the pangasius industry fully recovery from the third quarter?

VCN - After the first half of the year, the export price of raw fish was below the cost price, so it is forecast that Vietnam's pangasius industry will gradually recover, reversing the situation from the third quarter. Pangasius export is promoted in traditional markets and takes advantage of Free Trade Agreements (FTA) to exploit potential markets such as Russia and Brazil.
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promote export of agricultural and fishery products after covid 19 will the pangasius industry fully recovery from the third quarter
Pangasius export set a target of US$2 billion this year. Photo: Nguyen Thanh

Exports dropped by over 39%

According to the Ministry of Agriculture and Rural Development (MARD), compared to the same period last year, in the first five months of this year, pangasius production was estimated at 462,000 tons, down 6.3%. Notably, pangasius export was only US$456 million, down to 39.1%, of which, exports to China decreased by 48%, to the EU decreased by 47.3%, and to the US decreased by 19.8%.

To find new directions for Vietnamese pangasius, enterprises need to research products suitable for consumers' markets, pay attention to standards and regulations in the domestic market. Because, there are standards in line with European and American market standards but not yet suitable for Vietnam’s market. For example, the fish requires greater toughness and firmness.

Minister Nguyen XuanCuong

The decrease of pangasius exports makes the domestic material price of pangasiusquite bleak. The Department of Processing and Market Development of Agricultural Products (MARD) stated that materialpangasius pricesin the provinces of the Mekong Delta in May were low.After the holidayon April 30 and May 1, the price and amount of fish caught by the companies remained stable as before the holiday, reaching around VND18,000-18,200 per kgfor pangasius type I (700-900g per fish). Meanwhile, production costs range from VND20,000 to 22,000 per kg.

Demand for raw fish caught in the market remained low.Big companies rarelycatch fish outside but mostly catch in the affiliate system. A few small companies and processing companiescatchoutside.

Currently, Vietnamese pangasius isexported to 119 countries, however, Minister of Agriculture and Rural Development Nguyen XuanCuong said that this industry had continuously fluctuated, the rule was about 3-5 years each. Currently, the price of pangasiuswas only VND18,000-19,000 per kg, below the cost price. This was unreasonable. "Why does Vietnamese pangasius, accounting for 95% of the world market share, accept such a fluctuation?" Minister Nguyen XuanCuong said.

In fact, the Ministry of Agriculture and Rural Development also pointed out that the rapid decline in the export marketcaused many difficulties for enterprises from the beginning of the year until now. A large amount of pangasius had been in stock and could not be exported. Many enterprises lost orders or interrupted production, leading to the risk of overdue debt and great economic losses; especially affecting the sustainable development of Vietnam’s pangasius industry witha brand which had been built.

Recovering from the third quarter?

In 2020, the pangasius industry strives to achieve an output of 1.42 million tons; the accumulated farming area is expected to reach 6,600 ha and the export value is about US$2 billion. After two quarters of difficulties, the Ministry of Agriculture and Rural Development forecasts that from the third quarter of 2020, this industry will be able to recover completely.

Seafood export value in the first five months of the year reached US$2.81 billion, down 11.5% compared to the same period in 2019. Japan, the United States, China and South Korea which are the top four import markets of Vietnamese seafood,accounted for 57.2% of total seafood export value in the first four months of the year.

In the first four months, the four largest seafood export markets including Japan reached US$434 million, up 5.9% compared to the same period last year; The United States reached US$377 million, down 2.1%; EU reached US$336 million, down 14.3%; China reached US$246 million, down 9.3%.

Pangasius exports in the second quarter would find ithard to escape the negative growth.Ifthe disease is under control, production and business activities will be reopened, so the pangasius exports will have a chance to recover.Without giving an optimistic view as the Ministry of Agriculture and Rural Development, the Vietnam Association of Seafood Exporters and Producers (VASEP) said that with the situation of Covid-19,the situation would be complicated in major export markets such as the US and EU, Brazil.

Regarding the prospect of recovering the pangasius industry in the future, Mr. Duong NghiaQuoc, Chairman of the Vietnam Pangasius Association said that the policy of the provinces was to promote the industry to boost consumption.However, this could not be urgent,it depended on the situation of Covid-19 in countries around the world. If thesituation was positive,the disease in each country tended to decrease, pangasius exports would increase.

Deputy Minister of Agriculture and Rural Development PhungDuc Tien said that the Ministry of Agriculture and Rural Development was actively coordinating with the Ministry of Industry and Industryand Trade,associations, supermarkets and domestic distribution systems to boost pangasius consumption, not depend on export markets.At the same time, promoting trade promotion to export pangasius into traditional markets affected by the Covid-19 pandemicsuch as China, EU, Japan, ASEAN; and continuing to handle technical barriers and take advantage of opportunities from FTAs to develop potential markets such as Russia and Brazil.

By Thanh Nguyen/ Binh Minh

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