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Chinese merchants scrambling to snatch shrimp from Vietnamese   2009-06-23 - VietNamNet/SGTT

Seafood processing companies are complaining that a lot of Chinese merchants are going directly to shrimp farming areas to buy up the new crop at high prices, leaving no shrimp for domestic merchants to purchase.


Le Van Quang, Chairman of the Shrimp Subcommittee of the Vietnam Association of Seafood Exporters and Producers, said that recently a lot of Chinese merchants have arrived in Ca Mau province where they buy shrimp directly from Delta farmers. They offer to purchase shrimp at very high prices in an attempt to buy all the shrimp available. Though the average market price is now 140,000 per kilogram for ‘20 count’ sized shrimp, the Chinese merchants are said to pay up to 195,000 dong.


Chinese buy high, sell cheap


The biggest problem in this case, according to Quang, is that the shrimp which Chinese merchants collect in Vietnam will be sold later in China at the prices much lower than the prices at which Vietnamese companies can export to that market.


“Unless Vietnamese exporters can sell shrimp for at least 219,000 dong per kilogram to Chinese buyers, we cannot make a profit,” Quang said.


Chinese merchants not only have been buying shrimp directly in the Mekong Delta, they have also “attacked’ the newly developing ‘white leg shrimp’ producing area on Vietnam’s central coast.


Tran Van Linh, director of a seafood in Danang City, complained that he cannot ‘struggle’ with Chinese merchants in competition for the white leg shrimp.  He related that Chinese merchants appeared in mid May, when the shrimp harvest crop began in Quang Nam and Khanh Hoa provinces.  “They went directly to the shrimp ponds, willing to pay any cost to collect shrimp,” Linh said.


The appearance of Chinese merchants has made white leg shrimp prices skyrocket from 38,000 dong per 100-count kilo earlier this season to 45,000 dong now.


Seafood processing workshops in the central region all say that they will take losses if they purchase shrimp at such a high price to make products for export.


What’s Going On?


Why are Chinese merchants so avidly buying shrimp high to sell cheap later? Some experts said that Chinese merchants later inject additives that make the shrimp heavier by 20-30 percent. That explains why recently a lot of consignments of shrimp with impurities have been refused entry by Chinese inspectors.


A source at the Quang Ninh border gate said that in May alone, 40 containers of frozen seafood, including considerable quantities of shrimp consigned by Chinese merchants, have been stopped at the border gate. Only 13 of these containers were cleared by the Chinese customs agencies, and these shrimp imports were only sold in Chinese border provinces. The remaining consignments were destroyed or used for other purposes.


A lot of experts doubt that the Chinese merchants are scrambling after shrimp simply for commercial reasons. In Vietnam, a lot of shrimp processing workshops have to shut down or reduce production because of the lack of material shrimp for processing.


Nguyen Thanh Dam, General Director of Bac Lieu Seafood Company, said that the shrimp price has surged by 5-10 percent.  Seafood companies still encounter difficulties with export markets, causing Vietnam’s shrimp products to lose competitiveness vis-à-vis Indian and Indonesian shrimp.


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