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Shrimp processors scale down production, pain to last   2009-04-29 - Lao Dong, TBKTSG Online

Shrimp processors scale down production, pain to last
Workers pack shrimp into boxes for export at a processing plant in the Mekong Delta.  
Seafood exporters are facing a critical shortage of raw shrimp that may last several months, the Ministry of Agriculture and Rural Development said.


The ministry said after incurring losses last year many farmers have stopped breeding shrimp and the area under shrimp farms shrank 8 percent in the first quarter.

In addition, more than 264,500 hectares of shrimp ponds in Ca Mau Province and another 125,000 hectares in Bac Lieu Province have remained idle since the beginning of this year.

Last year, the price of shrimp dropped to VND55,000-60,000 (US$3.09-3.37) a kilogram at times.

Now they have risen to VND140,000. The ministry said many processors have even offered to pay shrimp farmers more than their export prices to keep their commitments to long-term foreign clients.

Tran Thien Hai, director of Minh Hai Seafood Company in Ca Mau Province, said recently farmers have been able to supply only 40 percent of the shrimp his company needs of around 50 tons a day.

The Vietnam Association of Seafood Exporters and Producers, or VASEP, said 35-40 percent of the shrimp processing plants in the Mekong Delta have cut back on production this year because of the raw material shortage. In Ca Mau Province, more than half of them have had to lay off workers.

According to the agricultural ministry, despite the high prices now, many farmers are reluctant to start farming shrimp again because of a cash crunch. As a result, the shortage could persist for the next several months, it said.

Shrimp can be farmed throughout the year in the Mekong Delta and farmers can start harvesting their crop after 4-5 months.

Deputy agriculture minister, Luong Le Phuong, said the current shrimp shortage is also because farmers did not use correct technique. Many bred the creatures in polluted waters, killing many of the shrimp, Phuong said.

Hai, who is also VASEP chairman, said processors’ demand for raw seafood is not being met. Their demand is growing at a minimum of 20 percent a year, but the supply is growing at just 7-8 percent, he said.

Last year 90 countries and territories imported shrimp from Vietnam but this year only 29 have, Hai said, pointing out that the shortage of raw materials is one of the main reasons for the drop.

Figures from the Ministry of Agriculture and Rural Development show that seafood exports in the first quarter dropped 7 percent from the same period last year to $744 million.

The government predicts overall export growth to slow to 13 percent this year from 29.5 percent in 2008 as the economic downturn hits demand in key markets like the US, Europe and Japan.

The ministry said it has asked the government to abolish import tariffs on several raw seafood items to help processors.

Phuong also said his ministry and VASEP would ask processors to sign contracts with shrimp farmers and pay them an advance.

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