Neil Ramsden: UnderCurrentNews

Vietnam farm-gate shrimp prices are looking volatile as business in the key producer regions of Ca Mau and Bac Lieu is being interrupted by lockdown measures, according to an update from an Undercurrent News source based in the country.

Crediting the rapid response of the government and industry body the Vietnamese Association of Seafood Exporters and Producers (VASEP), the shrimp sector has been stabilizing somewhat, he said.

“The shrimp prices are still at low levels, but farmers are not panicking and harvesting massively anymore,” he added.

The graph below, which uses data from Vietnamese fisheries platform Tepbac, shows just how low farm-gate prices have fallen. It doesn’t yet reflect an upturn in price which apparently began in week 33.

He gave example prices that have seen larger sizes just edge up by 1% or 2%: 40piece-per-kilogram up from VND 114,000 to VND 116,000/kg in week 33, 50-piece up from 101,000 to VND 102,000, and 60-piece up from VND 94,000 to VND 95,000.

80, 90, and 100-piece counts remained at in week 33, week-on-week, at VND 82,000, VND 76,000, and VND 70,000/kg. respectively.

“Local authorities have created favorable conditions for harvesting and transporting shrimp raw materials; agents can move in their areas to buy shrimp off farmers and transport it to processing factories,” the source explained.

Movement between provinces is now more readily available, meaning factories can buy raw material from other provinces and agents can transport it for them, he added. “This favorable movement is also helping the transport of farming materials — like feeds, chemicals, post-larvae — to farmers quicker, and helping farmers to stock the next crop as soon as possible.”

Still, he warned, there could be a significant shortage of shrimp raw material in the fourth quarter of 2021, with farmers worried at low global demand and other struggles linked to coronavirus that have seen their earnings plummet.

Many are stocking less, or stopping altogether, to see how the market progresses and whether prices will recover sufficiently, he said. ” Especially a shortage of big sizes is very clear, because even if farmers quickly stock right now then there is not enough time for shrimp to grow up to big sizes”.

The 20-30-count shrimp need four or five months to reach full size.

VASEP too has warned of the same, citing Ho Quoc Luc — chairman of the board at processor and exporter Fimex Vn — that “in the fourth quarter of this year there will be a serious shortage of shrimp materials, and the consumption price will increase sharply, especially large-sized shrimp”.

The Vietnam of office of seafood supplier Siam Canadian Group agreed, stating supplies from Vietnam “for sure will be less, if not very short, in the next several months”.

“It’s an easy prediction: most of the shrimp supplying countries are still suffering from COVID, supply will drop. Consumer countries like the US, EU, Canada all are recovering, so demand will increase. Supply and demand will create a big gap, I don’t see a reason why prices wouldn’t rise.”

However, he disagreed that business had begun to improve. On Aug. 24 he told Undercurrent most factories still declined to offer quotes for business, doing only some small spot orders and sales to regular customers.

“Due to the 3TC and IR2P (one-route, two-place) policy, factories still operating must bear very high costs,” said an executive there. “On top of that, production capacity is at maybe 20% or 30%, shipment dates are unpredictable; how can Vietnam compete with the other countries of origin?”

Still, this source did confirm prices had lifted on the back of increased raw material costs. “As far as we know, workers who are not in factories under the 3TC rule are still getting at least part-salary. The cost burden for factories is great.”

Ca Mau emerges from, then re-enters lockdown

The first Vietnam-based source went on to note that many factories have now vaccinated between 30% and 40% of their workforces.

Ca Mau had emerged from the country’s strict lockdown policy of “3TC”, which saw processors required to keep workers quarantined on-site to stay open. However, on Aug. 24 the province was closed down again after a coronavirus case was found in a shrimp factory, Siam Canadian’s office told Undercurrent, with confirmation from the first source too. This has sent Ca Mau back under 3TC, they said.

Bac Lieu, which looked like it might have been heading for this policy, has not had to yet.

“Soc Trang and Hau Giang are applying ‘green zone’ to maintain production and businesses. The factories can gradually increase their number of workers and operation capacity in the coming time so [they] can improve collecting shrimp from farmers and also processing the pending orders and load for customers.” He added that customers should expect delays from the packers.

Vietnam is a key producer of the value-added shrimp products sold widely in Europe and the US for Christmas party/ snack foods. This source noted that the plants making these types of goods are labor-intensive, so the availability of these is likely to be low and prices high.