Seafood businesses are worried about all kinds of rising costs

Many costs increase, making it difficult for seafood businesses. Photo: T.H

Price increases dramatically

Not only increasing the charges and fees in the last months of 2020, but also starting in 2021, the shipping charges will continue to increase rapidly.

In addition, many input costs for seafood production and processing also increased rapidly, causing seafood businesses to be extremely worried.

According to many seafood enterprises, in January 2021, the freight to the EU increased from 145% to 276% (depending on the port).

If in December 2020, the main port charge was US$2,850 / container, then next month it increased to US$7,000 / container (up 145%), some carriers also increased from US$2,800 /container to US$10,550 / container (276% increase).

Although the rate of increase is not as large as the EU, the already high rates of ships to the US are now increasing further: the freight to the West Coast ports increased by 14%, from US$3,500 / container in December 2020, to US$4,000/container by January 2021.

Freight to the East coast also increased from 14-19%, US$4,900/ container to US$5,600 - 5,850/ container.

Freight to Japan also increased from US$50-US$100/ container.

In addition to the rising cost of transporting exports, many other costs in the processing and export of aquatic products have also increased since the beginning of this year.

Specifically, the essential and main products serving the operations of factories also increased by 8-25%.

Typically, the price of rubber and plastic gloves in January 2021 increased by 8-9% over the previous month; 15% increase in duct tape. The bulk of the packaging also increased from 7% to 9.8%.

In addition, in December 2020, the price of soybean oil products increased by 10%, to January 2021 again by 9%. Some commodity square shrimp, such as: chlorine within three months (August 2020 - January 2021) increased 3.6%, average US$1,230 / ton to US$1,274 / ton.

Some other chemical products such as CaCl2 (Calcium chloride) increased by 20%; MgCl2 (Magnesium chloride) increased by 25%; Oxygen pellets also increased from VND15,800/ kg to VND17,250 / kg (an increase of nearly 10%).

Too many difficulties

In 2020, due to the change of the land price adjustment coefficient as a basis for calculating land rent, it will push the land tax price of the enterprise from 2-4 times compared to before.

In addition, at the end of last year, the project to collect fees for the use of the border gate area and seaports in Ho Chi Minh City was approved; although the fee is not high, it has a huge impact on businesses in all aspects.

By this time and opportunity, investors in infrastructure and logistics have an excuse to increase the price. The increase in shipping charges is also one of the reactions of this domino effect.

According to VASEP's assessment, the Covid-19 pandemic is still heavily affecting many major economies, many importers and exporters have to encourage and share difficulties to overcome the issue. Fisheries enterprises are trying to maintain jobs for thousands of workers in processing factories.

Import demand in major markets until the beginning of 2021 still contains many uncertainties; factory capacity has also decreased significantly according to orders. With only a few more days to go to the Lunar New Year holiday, seafood businesses are still making their best efforts to boost orders, ensure salary payments and take care of the lives of workers before the holiday.

However, the rising production costs add more difficulties for seafood businesses. This will be a huge challenge, difficult to overcome for businesses in the current time without the sharing of the regulators, as well as related parties.