Drought and fish deaths drown Vietnam’s seafood exports

By An Hong   August 4, 2016 | 05:04 pm GMT+7

Processing factories are floundering to find something to process.

Vietnam's seafood exports are expected to slow this year in the wake of a severe drought and mass fish deaths along central coastal provinces, the Vietnam News Agency has reported.

The country exported more than $3.15 billion worth of seafood products during the first six months of this year, up 4 percent from the same period last year, said Ngo Van Ich, chairman of the Vietnam Association of Seafood Exporters and Producers (VASEAP).

However the agricultural sector, including aquatic farming, took a hard hit by the worst drought and saltwater intrusion in nearly a century. Statistics show the sector posted negative growth of 0.18 percent in the first half of the year.

Adverse weather conditions have badly affected Vietnam’s aquatic farming leading to a lack of input materials and forcing many seafood processing factories nationwide to downsize operations, running at just 50-60 percent of their full capacity.

Vietnamese seafood factories have so far this year spent $485 million to import input materials.

The southernmost province of Ca Mau, which accounts for 25 percent of the country’s shrimp production, has been hit hard by the impacts of drought and saline intrusion, which have affected more than 53,000 hectares of shrimp farms and cost the province a total of VND260 billion ($11.6 million).

Official statistics released by the local government show the total output of farmed shrimp for the first six months is estimated to edge down three percent from the same period last year to 159,000 tons.

Ca Mau has revised down its 2016 export revenue target to $1 billion from $1.2 billion, said Ngo Thanh Linh, chairman of the provincial association of seafood exporters and producers.

Vietnam’s seafood exports have suffered another hit from the mass fish deaths along the country’s central coast.

“Our factory has been running non-stop for the past 23 years. Our main export market is Japan. But this year for the first time input shortages have brought us to a halt. We have been running at just 40 percent of our full capacity for the past six months,” said Tran Dinh Nam, chief executive of a seafood processing unit in the central province of Ha Tinh.

Ha Tinh Province, about 400 kilometers south of Hanoi, is one of four central coastal provinces hit by an environmental disaster caused by the now infamous Formosa steel factory.

Toxic chemicals discharged through a drainage pipe at Formosa have been blamed for poisoning the seawater, killing a huge number of fish both on farms and offshore.

The fallout has led to concerns from the United States, Europe and Japan about product quality and safety, which has created more hurdles for Vietnamese exporters.

Industry experts also blamed unfair rivalries among Vietnamese exporters for the declining seafood exports.

“The competition is getting increasingly ugly,” said Nguyen Hong Minh, co-founder of VASEP and former deputy fisheries minister, referring to Vietnamese businesses racing for export deals at lower prices.

VASEP Chairman Ngo Van Ich said seafood exporters will be faced with more challenges ahead.

European demand is dwindling following Brexit while the global economy has yet to show signs of a strong recovery.

As Vietnam has concluded a variety of new-generation free trade agreements, seafood export will find it more difficult to secure a firm foothold in traditional markets due mainly to technical tariff barriers.

Last year, Vietnam earned $6.6 billion from seafood exports.

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