Sources are attributing varying levels of importance to Vietnam's farmed pangasius shortage in April, as prices rise on low domestic supply.
A number of factors have combined to brings prices up sharply in March and April, it seems: reactions to regulation changes in the US, the usual hike in demand pre-Brussels show, and abnormal climatic conditions in the Mekong Delta.
“It's normal for salinity to rise at this time of year [in the delta], but this year it has been worse," Rens Elderkamp, strategic sourcing manager with Anova Seafood toldUndercurrent News.
“China had closed a dam upstream [on the Mekong River], which has mean less water reaching Laos, Cambodia, and Vietnam's Mekong Delta," he said. "The delta is made up of nine provinces, and usually just three are hit by this increase in salinity; those nearest the sea.”
Here the land is mainly used for shrimp farming, and higher salinity only causes them to slow their growth a little. However, this year the water shortage has meant all nine have been hit, and it has caused mortalities in pangasius farms, said Elderkamp.
“There is some fish available still for packers, but the situation has been described as a shortage,” he added.
Further, he is concerned that this could become a yearly occurrence.
“My concern is that this might happen each year. Water supply is increasingly tight for China, Laos, Cambodia and Vietnam. I wouldn't be surprised if this happened again in 2017, around February, March and April. We will have to see.”
Vietnam apparently appealed to China, which opened its dam again; warnings it may close it again since have as yet proven unfounded.
Prices have been pushed up too by the aftermath of the US regulation change, which saw the United States Department of Agriculture (USDA) take on responsibility for import inspections.
“Packers shipped out as much as they could to ensure it arrived before the regulation change [which entered into force March 1], and that has now caused high demand and prices at a time when there is less to ship,” said Elderkamp.
Prices rise to the packers
At the beginning of April sales executive Trinh Tuyen, with exporter Hung Hau, toldUndercurrentpangasius fillet export prices had leaped by as much as $0.30 per kilogram, bringing it up to around $2.20 or $2.30/ kg (100% net weight, EU-treated, freight on board from Ho Chi Minh).
Kristen Nguyen, salesperson with Mekong Seafood Connection, confirmed prices had climbed. On April 15 she added prices were still at this level. Elderkamp, importing into the Netherlands, confirmed the $2.30/kg price level was accurate, on April 20.
“Plants have been managing to collect raw material for production,” said Nguyen. “Some opinions have said that it can be even more expensive, while some said this is not a real situation; more like a bubble, because demand has not been too strong.”
Raw material prices might have reached "the top, unable to go up", she suggested, and Elderkamp largely agreed. “The salinity issue should now be over, for this year, and the US market will stabilize now too. Prices could go up further, but I don't expect them to,” he said.
A farmer, based in the Mekong Delta, on April 1 told theSaigon Timesthat prices to the processors were up, from VND 17,000-18,000/kg ($0.75- 0.80) earlier in the year to VND 21,000-22,000 in April.
Source: https://www.undercurrentnews.com
Keywords: EU, US, importers, keeping eye on, Vietnam, pangasius, shortage
