VASEP: the fourth quarter will be significantly shortage of shrimp raw material

VASEP: the fourth quarter will be significantly shortage of shrimp raw material 

As of July 15, 2021, Vietnam's shrimp exports reached $1.9 billion, up 14% over the same period last year. This is the result of great efforts of enterprises in the first half of this year. Currently, enterprises are still facing many difficulties due to the Covid epidemic right from the production stage of raw materials.

During the implementation of social distancing to prevent epidemics, the price of raw shrimp in the Mekong Delta provinces fluctuated.

According to Mr. Ho Quoc Luc - Chairman of the Board of Directors of FIMEX VN, after more than 4 weeks of implementing Directive 16 of the Government, shrimp production, business and export activities of shrimp processing factories in the Mekong Delta have been turned upside down. A number of factories was forced to close due to failure to perform "3 on-site" or suspected Covid-19 infection. The implementation of epidemic prevention regulations in each locality is also different, making both farmers and businesses inevitably confused. Localities that are isolated due to positive cases are more difficult to harvest, transport and consume agricultural and aquatic products, including shrimp. Therefore, the price of shrimp in key epidemic areas decreased sharply by 20,000 VND/kg compared to before, other regions also decreased but lighter, about 10,000 VND/kg. Because most processing plants are forced to reduce capacity to 30-50% to implement "3 on-site", the demand for raw materials decreases.

The situation of traveling between localities is difficult, so the stocking activities of the second crop tend to be quiet. It is forecasted that in the fourth quarter of this year, there will be a serious shortage of shrimp materials and the consumption price will increase sharply, especially large-sized shrimp.

As reflected by some other shrimp processing enterprises, a number of shrimp farming supplies, including shrimp seed and aqua feed, were transported to shrimp farming areas with difficulties and disrupted the stocking schedule.

Despite the obstacles, the path for Mekong Delta shrimp is still quite wide, because every year, Vietnam's shrimp exports often increase sharply from the middle of the third quarter to the fourth quarter. The current problem is the coastal provinces of the Mekong Delta should have solutions to expand the "safe green zone" to increase shrimp farming area; more factories producing “3 on-site”; creating favorable conditions in harvesting, trading and transporting shrimp from the pond to the factory faster, while still ensuring the regulations on the epidemic prevention.

In addition, the shrimp industry as well as the seafood industry in general need to ensure vaccination for 100% of workers, policies to support  for low-income workers, support businesses in insurance money, unions, bank interest rates, water & electricity bills...

It is necessary to have a synchronous coordination mechanism among localities in the pandemic control and prevention, to remove difficulties for businesses, and to ensure smooth transportation to maintain production and export.

With these solutions, businesses will accelerate the shrimp consumption for farmers, thereby increasing processing, striving to fulfill the shrimp export target of $3.8-4 billion this year.

Currently, the demand from import markets is high due to a shortage of supply from Vietnam during the lockdown. It is forecasted that after the disease is controlled, the price of raw shrimp will recover. According to a forecast of a shrimp industry expert, countries supplying deep-processed shrimp are also falling into difficult situations due to Covid (such as Thailand, Indonesia), so in the near future, deep-processed shrimp will increase their prices quite well. To ensure the growth rate of shrimp exports in the following months, it is very necessary to ensure stable shrimp farming activities.

Source: vasep.com.vn, SEABINA GROUP's translation