Restarting exports to Russia and learning old lessons

After four months, Russia has decided to open its doors again to Vietnamese seafood exports. 30 Vietnamese enterprises have been allowed to export to the market.

According to Duong Ngoc Minh, General Director of the Tien Giang-based Hung Vuong Joint Stock Company, Head of the Management Committee for Tra fish Export Management, tra exports sent to the market may bring in $200mil in turnover in 2009 and increase further in the coming years. Minh said that Russia is a market with great potential which deserves the attention of Vietnamese seafood companies.

 

Not lacking material fish

 

In the first three months of the year, 122 markets reportedly imported seafood from Vietnam, 37 markets fewer than in the same period of 2008. The most difficult period for Vietnam’s seafood industry is forecast to come in Q2 and Q3.

 

Experts said that in Q1 2009, enterprises mainly fulfilled the orders they received in 2008, and with materials left over from 2008. Meanwhile, they will meet difficulties in terms of both input materials and outlet markets as of April. As farmers incurred heavy losses in 2008, they have reduced aquaculture productivity. Seafood companies have had to purchase materials at high prices to fulfill the contracts they signed before.

 

The difficulties are expected to ease up in Q3, as the difficulties in input materials will be settled. However, experts have warned that export prices will not increase, while many companies will have to get export contracts by offering low prices.

 

Over the past month, the tra price in the Cuu Long River Delta has been increasing continuously. The 1-class tra fish price has reached VND16,500-17,000/kg, while 2-class VND16,000-16,200/kg. At such prices, farmers can earn profit of VND1,000-2,000/kg.

 

When asked if a material fish shortage could occur when tra is exported to Russia again, experts said that it is not a worrying issue. They said that companies and farmers have been well preparing for the exporting by developing material areas. Every enterprise has a material area which can meet 60-70% of total volume needed, and farmers will employ improved breeding techniques so that the fish will be the required sizes in a shorter time.

 

The old lessons

 

According to Nguyen Van Thanh, Director of the An Giang Agriculture and Rural Development Department, the government has listed tra fish among the strategic export items.

 

The Cuu Long River Delta now has 168 seafood export companies, but only 57 have processing workshops, while the other 111 companies, holding 11% of the market share, only export.

 

In 2007, the Russian side served warnings on 16 consignments of Vietnamese seafood after it discovered indications of poor quality. Meanwhile, in 2008, the number was 38, including 27 consignments of tra and basa fish products. This shows that several Vietnamese companies did not pay appropriate attention to quality when exporting products to Russia.

 

They are advised to keep a sharp eye on quality this time so that that door to Russia does not close again.

 

VietNamNet/TBKTVN

 

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This entry was posted on April 24, 2009 at 6:06 pm and is filed under Business, News. You can follow any responses to this entry through the RSS 2.0 feed.