VIET NAM SHRIMP UPDATE AMID COVID RESURGENCE ON AUG 08, 2021

VIET NAM SHRIMP UPDATE AMID COVID RESURGENCE ON AUG 08, 2021

I/ Viet Nam Covid update until Aug 08, 2021

Total infected cases in Viet Nam so far: 205.603

Total death cases so far: 3.250

Total recovered cases: 66.637

Total cases under treatment: 135.720

Infected cases in provinces of Mekong delta where shrimp farming and processing so far, the infected cases are still increasing and the most worryingly, the infected cases in Soc Trang, Can Tho and Hau Giang where biggest shrimp factories locate have increased significantly

• Tien Giang: 2.886
• Long An: 10.115
• Ben Tre: 1.073
• Can Tho: 1.681
• Kien Giang: 337
• Tra Vinh: 457
• Soc Trang: 370
• Hau Giang: 281
• Ca Mau: 40
• Bac Lieu: 58

II/ Shrimp harvesting & operation of factories

According to reflection of many farmers in Mekong delta, with strict lockdown to tackle with Covid they are continuously facing some following difficulties:

* Selling shrimp to agents is very difficult because the agents do not have workers for harvesting, and difficult in transportation of shrimp from farming areas through checkpoints, so many agents have to stop collecting shrimp

* Many farmers want to keep and raise shrimp longer because shrimp have just raised about 60 – 70 days if harvesting and selling now then the prices are very low, however; feed mills in Tien Giang closed down due to Covid cases leading to the shortage of feeds, then the agents sell the feeds with high prices and even no feeds for farmers to feed their shrimp. Together the difficulty of transportation of feeds through checkpoints, so farmers have to sell shrimp urgently at low prices, like 100 pcs/kg they just sell at 62,000 – 65,000 vnd/kg (~ 2.71 -> 2.85 usd/kg)

Not only farmers who raise shrimp are having many challenges but also hatcheries are having the difficulties silently too, because Covid strongly resurged in last July and became complicated quickly from middle of July to early Aug so that many hatcheries in Ninh Thuan and Binh Thuan where the hometown of hatcheries can not sell post larvae because of inconvenience of transportation and farmers do not want to stock more. This (cant sell post larvae) made the hatcheries had big losses for the quantity of post larvae have produced.

For the agents who buy shrimp from farmers and sell feeds, chemicals and other materials for farming are also facing with many challenges too, they transport shrimp after harvesting to factories they have to line up and wait for discharging in long time because there are many agents carrying shrimp to and factories operate very limited capacity. Well, the quality of shrimp go down and they have to bear the loss due to degradation of quality, and mostly small farmers loan the agents for feeds, chemicals…to raise shrimp and pay debts back after harvesting and selling shrimp but at this pandemic time the farmers can not sell or sell at low prices then also risky for the agents because they can not recall the debts and otherwise having debts with banks.

Lockdown in 19 Southern provinces has passed two weeks, and will prolong one week more. With the current situation, probably whole shrimp chain will face higher pressure in next week 32, as reported before 70% small factories already closed down and 30% remain are applying with 3TC but this rule also rose up many inadequacies and difficulties. This is refer to a statement of vice general secretary of VASEP with the prime minister on Aug 8, 2021:

“The implementation of "3 on-site" production in seafood enterprises for more than a week has generated many difficulties and shortcomings, which have a great impact on ensuring safety for epidemic prevention and control and also efforts to maintain production and export.

Specifically, the reality is that only about 30% of seafood enterprises in the southern provinces can ensure the "3 on-site" condition. Businesses that are not eligible for "3 on-site" have had to stop production, leading to a number of consequences such as bank debt, supplier debt, loss of customers, the risk of not being able to mobilize workers after the lockdown…

With factories that can arrange “3 on-site”, the number of workers that can be mobilized is only 30-50%, the rest have to quit or take unpaid leave. And the average production capacity has been reduced to only 40-50% compared to before. It is estimated that the overall capacity of the whole area will remain 30-40% only.

Meanwhile, aquatic materials mobilized for processing - export only reach about 40-50% compared to total available sources due to the implementation of the general distancing. Estimated, raw materials for processing and exporting in the last months of the year 2021 will be a shortage of 20-30% (reducing exploitation, reducing stocking of breeding stock and reducing import sources).

Materials, accessories, packaging... for seafood processing also shrunk, reducing supply capacity by 50%. While production has been reduced, many orders have been shelved or lost, the costs for businesses to ensure "3 on-site" have skyrocketed and are creating great pressure: the cost of weekly testing, the cost of equipping workers with conditions for eating, sleeping and working at the factory increased by 50-100%, the cost of paying extra wages for workers to stay at the factory increased by 30-50%, paying wages and supporting employees for leave, the cost of packaging, materials, powder, auxiliary materials increased, the cost of electricity to produce and maintain the cold storage and especially this time, the business is facing a lot of difficulties in terms of freight charges. Sea ships continuously increase from 2-3 to 10 times depending on the route, leading to a very high increase in the overall cost of production, while the efficiency of production and business decreases”

From Aug 6, many provinces in Mekong delta have vaccinated for workers and VASEP/ MARD also called for the Government prioritize vaccines more for seafood industry sector and agricultural sector to maintain farming, catching, processing, and exporting. They also suggested a new rule “medical on-site” that means factories actively set up medical stations on-site responsible for health checks for workers 2 times/month, coordinate with local CDCs to deal with F0 cases, self-responsible for shuttling workers from homes and factories as long as ensuring the prevention and control of pandemic. Like this, factories can save costs, maintain the production, maintain works and salaries for workers, complete orders and keep customers…

III/ Shrimp prices

* Black tiger: the buying prices have decreased 5000 vnd/kg (~ 0.22 usd/kg) compared with last week 30, the reason is raw material harvested much more due to right tides and consumption is weaker

20 pcs/kg ~ 225.000 vnd/kg, 40 pcs/kg ~ 170.000 vnd/kg, 60 pcs/kg ~ 135.000 vnd/kg 

* Vannamei: the prices of Vannamei were fluctuating a lot through the week and trend to down sharply at weekend. If Covid cases in Soc Trang, Can Tho, Hau Giang getting more in next week, then probably the prices of Vannamei will drop further for big sizes, meanwhile; the prices of small sizes get stable because the current prices are already bottom

40 pcs/kg ~ 114.000 vnd/kg, 80 pcs/kg ~ 82.000 vnd/kg, 100 pcs/kg ~ 70.000 vnd/kg

Source:  SEABINA GROUP