Pangasius takes advantage of the recovery, seizes new export opportunities

Quick recovery of the pangasius market in the Mekong Delta with new opportunities but solutions are needed to strengthen the linked production chain for sustainable development.

Favorable exports trigger a price increase

In the Mekong Delta, since the last 2 months of 2021, pangasius production, purchasing, processing and exporting is heating up. Fish farmers and export processing businesses said that, after the Covid-19 pandemic, there are signs of a strong recovery in the market. Export of pangasius products caught up with recovering consumption in many countries. Currently, all pangasius export markets are getting better. Since then, the price of commercial pangasius has increased to 29,500 – 30,000 VND/kg, an increase of 4,000 – 5,000 VND/kg compared to the second half of 2021.

People raising fish in Cu Lao Tan Loc, Thot Not District, Can Tho City said that: There are still some households struggling to maintain their pangasius farming ponds in the form of contracts associated with businesses. Because after 3 years of hard work, the price of fish dropped, farmers suffered loss, causing many fish farmers without a contract to suspend their farms.

Therefore, when realizing that the market for commercial pangasius is heating up, fish farmers want to return to buy breeding stock. Currently, price of a high quality, right-sized farmed pangasius is being purchased by businesses at the highest at 30,000 VND/kg. After deducting costs, there is a profit of about 4,000-5,000 VND/kg even though the cost of feed, input materials and labor are increasing.

Mr. Nguyen Ngoc Hai, owner of a household raising commercial pangasius and producing pangasius fingerlings along the Hau River in Thoi An ward, O Mon district, Can Tho city, said: When the price of pangasius shot up by the end of 2021, some fish farmers started looking to buy fingerlings. But the source of pangasius fingerlings, after a fairly long time of suspension, suddenly faced a great demand that could not be met immediately.

That is not to mention some hatcheries raising pangasius in downstream areas such as Can Tho have to rely on fry sources from Hong Ngu district (Dong Thap), but the rearing fails, suffering losses, not meeting the needs of the people.

Commercial pangasius farming in Thoi An ward, O Mon district, Can Tho City. Photo: Huu Duc.

In the last week of February, not only the price of commercial pangasius increased, pangasius fingerlings’ prices also increased to 40,000-45,000 VND/kg (30 fish/kg), some households even wanted to raise immediately accepting to buy fingerlings at 55,000 VND/kg but the hatchery does not have enough pangasius to sell.

Meanwhile, some businesses that purchase and process pangasius for export began to worry, if commercial pangasius increases in price, it will be very difficult for export contracts signed at old prices. With the price of pangasius increasing, many experts suspect that there will be a potential risk of many households returning to spontaneous raising of pangasius as in 2018.

Deputy Minister Phung Duc Tien speaking at the Can Tho City Pangasius Conference on February 25. Photo: Huu Duc.

After a field trip to the pangasius farming area in An Giang and Dong Thap provinces last weekend, Deputy Minister of Agriculture and Rural Development Phung Duc Tien said that the raw pangasius market in the Mekong Delta is recovering quickly and opening up. However, the Deputy Minister noted that the current increase in the price of pangasius raw materials is an important premise for the development of production and consumption in 2022, but there are also many potential risks to the stable development of the sector. Therefore, in order to achieve good results in 2022, the Directorate of Fisheries and relevant functional agencies under the Ministry need to coordinate with localities, properly assess the situation and promptly offer remedial solutions to develop an effective and sustainable pangasius sector.

Carefully expanding the farming area

According to the Directorate of Fisheries of provinces with pangasius farming areas in the Mekong Delta, the pangasius farming area in 2021 reached over 5,850ha, an increase of more than 10% over the same period in 2020. Comparing the farming area in 2020 – 2021, the area of ​​pangasius farming in the 3 months of 7-8-9/2021 decreased by about 30 – 55% compared to the same period in 2020.

However, the farming area in the months of March – June and October – November in 2021 increased sharply compared to the same period last year. These are the months before and after social distancing in the provinces and centrally-run cities of the Red River Delta region. In particular, after September 2021, the growth in area shows that the pangasius sector has returned to a normal production rate after a long period affected by the Covid-19 pandemic.

Aquaculture production in 2021 still maintained growth. Aquaculture production for the whole year reached over 4.8 million tons, up by 1.1% compared to 2020, of which pangasius production reached 1.52 million tons, up by 1.63% over the same period in 2020. Pangasius export turnover reached 1.62 billion USD, up by 8.4% over the same period last year. This can be seen as a spectacular reversal of the pangasius sector in 2021.

To Tuong Lan, Deputy General Secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP), said that along with opportunities, there are still challenges posed to the pangasius sector in the coming time. Fisheries authorities and partners involved in the production chain need to assess and orient the farmers. That is to balance supply – demand to increase profits and value for the pangasius industry.

After the Covid-19 pandemic, although production activities have recovered, the pandemic has not yet ended, which is still a challenge for the supply chain. Production and transportation costs escalate, the shipping situation still requires positive solutions. On the other hand, in the US, rising inflation may cause purchasing power to decrease, so a sudden increase like in 2021 is unlikely.

Commercial pangasius harvesting in the Mekong Delta. Photo: Huu Duc.

According to the Directorate of Fisheries, in 2022, the pangasius industry is expected to produce a commercial output of 1.6 – 1.7 million tons. Export turnover reaching over 1.6 billion USD. Dr. Tran Dinh Luan, Director General of the Directorate of Fisheries, said: The new generation of free trade agreements that our country has joined are both a challenge and an opportunity for Vietnam’s pangasius products to continue to be exported to the EU, US,… However, the increasingly strict requirements from the import market require our country’s pangasius sector to make stronger efforts.

On the other hand, looking at the reality from the pangasius farming area, we need to be careful about the price spike. Because we have paid a lot from the years 2019-2020-2021. When the price increases followed by an increase in area, the increase in output pulls the price down.

In addition, when increasing the area, farmers do not comply with the regulations on the number of farming establishments, food safety and other conditions, so there will be potential risks. In principle, if the price of pangasius increases, there will be competitive and substitute products. In general, we will lose the market, because we are not about building a brand but just normalizing the pangasius products.

Mr. Tran Dinh Luan emphasized: For the past 2 years, the Ministry of Agriculture and Rural Development recommended to not expand the farming area. Therefore, localities propagate, disseminate, guide the transfer and monitor farming areas. Especially in the integration of socio-economic planning between localities, it will bring potential and advantage areas to develop pangasius more effectively. In the trend of digital transformation of the agricultural sector, the pangasius industry will pioneer in digitizing all facilities from farming to processing, openly and transparently manage input and output and reasonably balance supply and demand. Only then will pangasius grow stably and sustainably.

Examining and forecasting the pangasius export market opportunities in 2022, Ms. To Tuong Lan, Deputy Secretary General of VASEP, analyzed: The import market recovered and grew well, including the 4 main markets group of: China (31%), US (23%), CPTPP (13% – partner countries participating in the CPTPP Agreement) and EU (6.6%) accounting for 73.6% have strong growth potential. Pangasius export price is forecasted to increase by about 5% due to farming, logistics, labor costs… Therefore, pangasius export in 2022 is forecasted to increase by 20-22% compared to 2021.

Author: Huu Duc – Minh Dam

Translated by Nguyen Hai Long

(Source: https://vietnamagriculture.nongnghiep.vn/)

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