VIET NAM SHRIMP INDUSTRY IS CONTINUOUSLY CHALLENGED BY COVID-19

Wednesday, 25/08/2021, 21:05

VIET NAM SHRIMP INDUSTRY IS CONTINUOUSLY CHALLENGED BY COVID-19

Last week 33, thanks to the synchronized solutions by Government, MARD, Fishery Department, VASEP and other relevant parties then the harvesting, collecting, selling & buying and transporting of shrimp in Mekong delta are improved more smoothly.

Two provinces Soc Trang & Hau Giang have applied the zones “green, red, yellow, orange” according to the level of Covid-19 cases to tackle with the epidemic and maintain production and business activities, together with Ca Mau and Bac Lieu provinces eased the level of social distancing from the directive 16 to the directive 15. These positive changes made shrimp prices in Mekong delta slightly went up, even not much but amid the complicated Covid-19 circumstance the shrimp prices got stable and increased a little bit be very good to keep farmers not panic and optimistic to invest for the new crop.

However; jumping to early this week 34, the situation is badly changing backwards. The infected Covid-19 cases are still rising deadly in HCM city and the neighboring provinces Binh Duong, Dong Nai, Long An, Tien Giang so that the Government has imposed the pandemic prevention & control methods more strictly, all people in HCM city must stay indoors from Aug 23 till Sep 6. The military forces deployed to control checkpoints and take care of buying and delivering foods & other necessary things to households, these are affecting to the movement, transportation and logistics a lot.

Shortly after Ca Mau and Bac Lieu provinces eased the social distancing, then both of provinces had found the fresh infected Covid-19 cases in communities. So quickly the provinces returned to apply the directive 16, Ca Mau reapplied 3TC for seafood factories, meanwhile; Bac Lieu hasn't deployed 3TC yet. This change quickly affected to the shrimp supply chain, farmers are hard to sell their shrimp, agents are hard to mobilize staffs to harvesting and transporting shrimp, movement and transportation through checkpoints become difficult again, drivers must have Covid-19 negative tests and “the approved movement pass”. Consequently, farmgate shrimp prices in early week 34 dropped significantly within 4,000 - 6,000 vnd/kg (~ 0.18 - 0.26 usd/kg) depending on sizes.

At moment, whole shrimp supply chain is facing with these difficulties:

# Farmers

very hard to call traders to sell shrimp
selling prices are very low leading to big losses
hard to buy feeds, post larvae, chemicals...to feed shrimp daily or maintain farming and also stocking for new crop. At the same time, the prices of these farming materials are being skyrocketed
low shrimp prices, hard to sell shrimp and buy farming materials, have big losses so farmers are getting panic or much worry how they can continue farming

# Traders (or raw material agents)

hard to mobilize workers for harvesting
difficult to move in farming areas to buy and transport shrimp through checkpoints
difficult to interprovincially transport shrimp raw material to processing plants
because plants are applying 3TC so receiving is slower than normal days and traders must wait very long time to discharge raw materials leading the quality of shrimp degraded and the selling prices reduce accordingly
lack of cash to pay for farmers

# Material agents (supplying feeds, chemicals, other materials to farmers)

difficult to import feeds, chemicals and other materials from suppliers due to logistic disruption
difficult to distribute these materials to farmers
normally, farmers buy in debts and pay after selling shrimp but in this circumstance, farmers get loss then material agents are facing risks unable to recall debts leading to bankruptcy

# Processing plants

do not comply with 3TC, so they have to shut down their operation. Or in case of application 3TC, then operation capacity is limited and less workers, also very inconvenient and uncomfortable for employee
additional costs rising a lot but less effective, mostly loss
with less workers, plants mostly just collect shrimp and freeze, and partly process some important orders so they are facing with loss customers and loss markets
sub-materials, packaging, food additives…for processing are delayed due to the movement restrictions against the pandemic
lack of finance to buy shrimp and maintain operation
capacity of cold-storage is almost full
logistics disrupted, ports' congestion, extremely high freights

# Hatcheries

difficult to transport post larvae from Ninh Thuan, Binh Thuan provinces to Mekong delta
a big volume of produced post larvae must throw away leading to big losses

# Feed mills

difficult to apply 3TC and some feed mills had Covid cases then must shut down
additional costs have risen
due to the global supply chains discontinued leading to the prices of ingredients increased but hard to import
difficult to transport feeds from feed mills in Dong Nai, Binh Duong, Long An, Tien Giang to far most Mekong delta

With the current progress of Covid-19 pandemic, it is really very challenging to Viet Nam Shrimp Industry in this year 2021 and the sector needs to proactively work with the Government, MARD and relevant stakeholders to overcome as quickly as possible.