Pangasius
Market Report - July 2009
Outlook positive for pangasius
During the first months of 2009 pangasius was under pressure, as Russia and Egypt banned imports. In
addition, negative press coverage in Italy
and Germany
scared consumers away from buying of pangasius. All over the world, local
fishermen are complaining that the fish from Viet Nam is creating unwanted
competition by undercutting prices substantially. At the moment, it is
probably the only fillet on offer in Europe
below EUR 10.00/kg. On the other hand, because of low prices paid to
pangasius farmers in 2008, the area devoted to breeding has been reduced.
In the Mekong Delta, the country’s major pangasius breeding region, the area devoted to breeding the
fish was reduced by 600
hectares, to 5 240 hectares at
the end of last year. In provinces that are leading
producers of pangasius, such as An Giang and Dong Thap, 30% of the ponds are
lying unused after farmers suffered losses because of oversupply last year.
As a result of the reduction in supply, prices were moving upwards in the
opening months of the year, both in Viet Nam and in the European
market. This price hike came to a stop in May 2009, as competing species
report declining price levels. Prices of pangasius at the origin started to
decline sharply.
After 10 years of developing pangasius breeding and processing, the fish is
exported to 107 countries and territories. Viet Nam plans to produce between
1.3 million tonnes and 1.5 million tonnes, and export USD 1.5 billion worth
of the pangasius products in 2009. Last year, the Mekong Delta produced 1.2
million tonnes and exported 633 000 tonnes of pangasius products worth USD
1.4 billion.
In the first four months of this year, Viet Nam earned USD 375 million
from exporting 163 000 tonnes of pangasius, a slight decrease compared with
the same period last year. In terns of quantity, exports were more or less
stable. The main export recipient was the EU with 65 000 tonnes, or 40% of
the total. Within the EU, Spain
is reportedly the major importer of pangasius from Viet Nam, reporting a 10%
increase in its imports. In the present economic situation, the Spanish
consumer prefers the relatively cheap pangasius fillet over more expensive
traditional products.
The distribution of benefits in the value chain for pangasius, from the small
scale fish farmer in Viet
Nam, to processing in relatively large
processing companies, to finally being offered for sale in the European
market is quite informative. Of the final sales price of EUR 7.00/kg, 10%
goes to fish farmer, 10% to the fish collector, 20% to the processor, 20% to
the trader and the remaining 40% to the retailer.
Exports resume in major markets
Egypt has affirmed its
official resumption of granting permits for Vietnamese pangasius to be
exported to Egypt.
Recently, incorrect information about Vietnamese pangasius was published in
Egyptian newspapers, implying that pangasius was unsafe for consumers. The
misinformation resulted in negative perceptions by Egyptian consumers,
forcing the Egyptian Embassy in Hanoi to halt
temporarily the granting of permits to local traders to export pangasius to Egypt. Egypt is the
sixth most important market for pangasius and imported some 26 600 tonnes in
2008.
Viet Nam plans to export 100
000 tonnes of pangasius to Russia
this year, after that country lifted an import ban in April 2009. Last year
118 000 tonnes of the fish were shipped to Russia before pangasius imports
were prohibited in late December 2008. It was put in place after some
shipments of Vietnamese seafood were found to be contaminated with banned
chemicals. Russian authorities also claimed that Vietnamese exporters
progressively lowered prices to compete with one another, hurting Russian
importers. Russian authorities have now fixed a minimum price of RUB 78/kg
(USD 2.30/kg) a kilogram. Violators will be fined USD 50 000 and banned from
importing Vietnamese seafood.
At the end of June 2009, Viet Nam had exported over 10 000 tonnes of tra and
basa fish at USD 3.10/kg to Russia since 25 April 2009 when Russia officially
reopened its market to Vietnamese fish. In July alone, another 15 000 tonnes
of fish are expected to be shipped to Russia, as a number of Russian
importers asked for more of tra and basa from Viet Nam in the form of both
packaged fillet and whole fish. Apart from Russia, demand from many other
foreign importers such as East European, African and American countries are
strong.
In May 2009 the New Zealand Federation of Commercial Fishermen attacked a government
move to allow the import of catfish from Viet Nam, saying it could dominate
the fish and chips trade and ruin the local industry. The market for New
Zealand's hoki dropped by 90% when Vietnamese catfish imports were allowed
into Australia,
US imports of catfish (including pangasius) declined somewhat in the first
three months of the year: some 11 500 tonnes were imported during the first
quarter of 2009, 7% less than in the same period of 2008. While Viet Nam, the
top exporter of catfish to the US market reported a modest increase in
exports, Chinese catfish exports dropped sharply, probably in reaction to
more strict sanitary controls by US inspectors.
New standard for pangasius
On 29 April 2009 Global GAP, announced its new pangasius and tilapia
standards, which were published after having been tested on fish farms. The
development of the pangasius standard started in Viet Nam, the main producing
country. Supported by German Technical Cooperation (GTZ), the working group
presented a first draft proposal to GlobalGAP. The draft standard was subject
to trial audits on six farms and stakeholder consultation.
The US International Trade Commission announced in June 2009 that it would
keep the tariff on frozen fillets of Vietnamese catfish, known in the US as
'basa' and 'tra,' afraid that lifting the duty would harm the domestic
catfish industry within a 'reasonably foreseeable time.' This decision did
not come as a surprise. At present, Vietnamese exporters are more concerned
with an upcoming decision as to whether to reclassify basa and tra as catfish
under the US farm bill. This would mean more severe testing for antibiotics.
Prices of pangasius likely to increase further
The decline in production of pangasius in Viet Nam will result in a substantial
shortages in raw material, and , at least in the near future, a substantial
increase in price. The economic crisis in Spain, which is having negative
implications for many other fish species, will result in more demand for
pangasius, well known as a relatively cheap fish. In the US market, the
situation might become difficult if basa and tra were classified as catfish.
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