Shrimp sector must cut costs

Truong Dinh Hoe, secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP), made the statement at a round table on improving the competitiveness of Vietnam’s shrimp industry. The meeting was held by the Ministry of Agriculture and Rural Development’s General Department of Fisheries, VASEP and GIZ’s Integrated Coastal Management Programme in Can Tho on November 15.

The dialogue attracted 100 participants from central and local state offices, businesses and farmers in Cuu Long (Mekong) River Delta.

The General Department of Fisheries said Vietnam had 700,000ha shrimp rearing land in 30 provinces and cities. The total area of rearing shrimp was expected to increase to bring millions of jobs and develop a supply chain for medicine, feed, services and processing activities.

Workers at a shrimp processing factory in Tra Vinh.

Hoe said in 2015, Vietnam was the second largest shrimp producer in the world, accounting for 14% of global market share. Vietnam’s shrimp exporters exported large amounts of giant tiger prawns to the US and Australia.

Local shrimp enterprises have expanded their market shares while the shrimp industries in Thailand and China have been hit by diseases, he said.

Vietnam would face difficulties in exports when Thailand and China’s shrimp industries recover if local enterprises don’t reduce production costs and improve the quality of export shrimp, Hòe said.

Vo Van Phuc, director of Vietnam Clean Fishery JSC, said at the dialogue that the shrimp industry has had low output and high production costs and was dependant on the demand of Chinese traders.

In addition, farmers and processing enterprises have not created production and business chains, he said. The local supply industry has not met demand of the processing sector while the state has not paid much attention to developing the processing sector.

Hoe said domestic production costs had risen, including feed, varieties, electricity and water costs. The shrimp industry lacks strong links between farmers and processors and has few value-added products. Some state policies for industry have been insufficient. Meanwhile, markets such as Japan and Australia have enhanced regulations controlling food safety for imported shrimp.

Hoe said to improve the competitiveness of Vietnamese shrimp on the world market, the local shrimp industry must reduce production costs and improve food safety.

The enterprises should make use of preferential tariffs under free trade agreements and follow export markets closely to create reasonable business plans, he said.

Phuc said the State should only give operation licences for enterprises meeting conditions about food safety and operation environment. It should also enhance management for quality of material, chemical products and animal medicines.

Many participants said the local shrimp industry should have transparency of input production and increase the quality of varieties and feed.