Warning of raw material shortage for seafood factories for the end of 2021

According to the statistics released by the Directorate of Fisheries under the Ministry of Agriculture and Rural Development 120 out of 449 seafood factories have suspended operations because of the coronavirus pandemic. The rest factories have chosen to meet “three-on-the-spot” requirements so the capacity was only at 30-40%

Meanwhile the world’s major shrimp producers such as India and Indonesia have been affected by the pandemic, leading to the disruption of the shrimp supply chain and lowering shrimp supplies on global market

According to Ho Quoc Luc, Chairman of the Board of Sao Ta Foods Joint Stock Company (Fimex VN), demand for shrimp has been high now. However it's not easy for Vietnamese shrimp industry to take advantage of this opportunity. Apart from the closure of many seafood factories due to both subjective and objectives causes, the rest has downsized the operations and chosen “three on the spot” or “one road two destinations” measures. Thus, there were only 40% of employees able to work under these requirements.

“40% of the workers were gathered from different production lines to be enough for one production line. Therefore skill use varied between as well as within workers leading to the productivity not as high as expected. Moreover the “three-on-the spot”workers were always worried about their health and their families, so they didn’t feel secure with their work” Ho Quoc Luc explained.

He also said that those elements have made seafood factories operate ineffectively. In the context of the current circumstances,technique-related errors have occurred more often

According to the COB of Sao Ta Foods J.S.C, this was just the tip of the iceberg. In fact, seafood enterprises could face many other problems including increased costs and expenses incurred. As a result, shrimp production has shrunk significantly and shrimp export dropped in August 2021.

Raw material shortage

Many southern provinces particularly the Mekong Delta have recently imposed social distancing to prevent and control the Covid-19 pandemic. This has led to a sharp decrease in aquaculture production including shrimp and catfish

Besides, the transport of materials and shrimp seeds to start a new crop has been facing many obstacles. Many farmers have even chosen to delay operations. Therefore, there is a high chance of raw material shortage for seafood factories in the year-end of 2021 and in early 2022.

According to Tran Dinh Tuan, General Director of the Directorate of Fisheries, the drop in seafood prices, especially shrimp prices that has seen a fall of 20-30% so far could be driven by three factors.

The first one was the closure of many seafood factories. The second one was the difficulties in transportation, movement and material purchase. The last one was the implementation of social distancing in the shrimp-farming areas.

Additionally, other seafood products including wild caught seafood has been in the same situation as prices have dropped and social distancing imposed has made transport from fishing ports to processing plants difficult.

The plunge in seafood prices has recently made aquaculture farmers very uncertain about their operations. In the face of the situation, the Ministry of Agriculture and Rural Development (MARD) as well as the Directorate of Fisheries have taken drastic measures to help farmers overcome difficulties.

According to Ho Quoc Luc despite facing a lot of difficulties, there were positive sign in Vietnamese shrimp industry. The statistics by Vietnam Association of Seafood Exporters and Producers (VASEP) showed that in the first eight months of 2021, Vietnam's shrimp export turnover rose 6% from the same period last year.

"Although Vietnam's shrimp export volume has now decreased we don't need to fear that we may loss our share on global market because our major competitors are even facing bigger difficulties," said, Ho Quoc Luc -the COB of Sao Ta Foods J.S.C.