Rising tra fish prices in Vietnam a cause for concern
TRA fish prices in Vietnam have hit a new high since 2019, but insiders are concerned that high prices do not bode well for farmers.
Hung Ca Co Ltd director-general
Tran Van Hung said that it had been the case for many years that farmers boosted production too much when they saw prices rising. Consequently, prices normally slumped heavily after reaching record highs.
The fish price peaked in 2018 and led to a rush on production expansion. About one year later, the price began to drop sharply in price due to overproduction, from 33,000 dong ($1.44) to 19,000 per kilogramme, causing losses to farmers.
Hung believes that some firms were probably manipulating prices to tempt farmers to produce more, thereby benefiting from the ensuing oversupply.
“Firms benefit from falling prices since they purchase using deferred payments,” he explained.
Nguyen Ngoc Hai, a farmer in Can Tho city, estimated that only around 10 per cent of farmers could turn the rising prices to their advantage. The rest have to wait for their fish to mature.
Unfortunately, market prices will probably fall when the fish reach a suitable size for sale, placing these farmers at a disadvantage.
Hai said that “30,000 dong per kilogramme is not high enough to be worth the effort, but I’m concerned that the prices might fall soon”.
Another farmer Tuan in Dong Thap province shares the concern.
Tuan said he would sell about 1,000 tonnes of the fish to China at 30,000 dong per kilogramme. With farming costs of 25,000 dong per kilogramme, the batch is expected to earn five billion dong, enough to offset his previous three-year losses.
However, the farmer is worried that fish feed prices have risen by 40 per cent, to 14,000 dong per kilogramme. Fingerlings have doubled in price to 60,000 dong per kilogramme.
That means he is spending 27,000 dong on every kilogramme of tra fish harvested next season.
“If tra fish prices drop next season due to overproduction, farmers will probably have to sell their fish at a loss,” he said.
Trung Tin, another farmer in Dong Thap, said that mounting fish feed and fingerlings prices usually go hand in hand with rising prices.
He estimates that farming costs will rise to over 25,000 dong per kilogramme next season. That means all farmers’ efforts will be wasted if the fish prices go back to 22,000-24,000 dong.
Le Chi Binh, vice-president of An Giang province’s Pangasius Farming and Processing Association, urged farmers not to expand farming areas amid rising prices because the prices were expected to level off in July.
He also said that farmers who increase output regardless would become unprofitable due to abundant supply.
Vietnam Association of Seafood
Exporters and Producers deputy secretary-general To Thi Tuong Lan reported growth in Vietnamese tra fish export in the first quarter of this year.
She said that tra fish prices in the US market had recently peaked at $3.95 per kilogramme and were unlikely to grow any higher. The same is also true for the Chinese market.
Accordingly, she believes farmers and firms should align production with demand to prevent overproduction from reoccurring.
She suggested the production target for 2022 equals that of 2021, at around 1.6 million tonnes.
Deputy Minister of Agriculture and Rural Development Phung Duc Tien urged localities to keep farming areas in line with production plan and to improve the quality of fingerlings and fish feed, thereby ensuring stable output and export.
He also called for close cooperation between farms and firms through supply contracts so the latter could monitor production more closely.
Last year, Vietnam produced 1.52 million tonnes and exported $1.62 billion of tra fish.
The production target was set at 1.6-1.7 million tonnes and export revenues at over $1.6 billion this year.