Inflation takes toll on seafood companies’ profits

By Tat Dat   February 11, 2023 | 03:28 am PT
Inflation takes toll on seafood companies’ profits
Workers at a pangasius processing factory in the Mekong Delta City of Can Tho. Photo by VnExpress/Cuu Long
Major seafood producers saw profits plummet in the last quarter of 2022 as inflation hit consumption and costs rose.

Vinh Hoan Corp, a pangasius producer based in the Mekong Delta, reported profits were down by half year-on-year to VND200 billion ($8.48 million).

Shrimp producer Sao Ta reported a 26% decline to VND81 billion.

Smaller producers also struggled.

International Development and Investment Corp, a producer of seafood and fish oil, saw profits fall by 70% to VND25 billion.

Exporter Cuu Long Fish’s earnings were down 76% to VND4 billion.

Analysts at Viecombank Securities said seafood feed costs were 40-60% up by the end of last year from three years earlier.

The cost of fish used as food, for instance, dropped in August but was returning to a near historic peak of VND33,000 per kilogram.

The Sao Ta management said demand has been falling due to inflation and fears of a global recession.

Vietnam’s fisheries exports were worth a record $11 billion last year, but dropped by 14% year-on-year in November and 13% in December.

With analysts warning about inflation and exchange rate risks, the industry targets $10 billion in exports this year.

In January they were down 31% year-on-year to $600 million.

Analysts at SSI Research expected new orders to come from the third quarter onwards, but warned prices would be down 20-30% from last year.

The reopening of China is likely to boost Vietnam’s pangasius exports, but prices in that market are 40% lower than in the U.S., they added.

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