Chu Van An, deputy general director of Minh Phu Seafood Corporation in Ca Mau, said Chinese traders buy raw shrimp at such high prices that local processing plants can’t compete.
After buying raw shrimp, Chinese traders inject substances into the shrimp to increase their size and then export them at high prices. Vietnamese companies do not do this, so they can’t compete with the Chinese traders, said An. Consequently, local shrimp processors and exporters are grappling with a shortage of raw shrimp.
Kich said, “Several contracts for export to Japan and the USA have been signed, but enterprises do not have shrimp to process and deliver to their partners. My company has received many orders for export to Japan, but can hardly find material supply. They (the Chinese traders) have bought it all, big shrimp, small shrimp, everything.”
The generous purchases of the Chinese traders greatly affects the local shrimp processing industry, said An. “Workers lose their jobs, and...the USA, Japan and South Korea will likely switch to other suppliers. Therefore, decent shrimp traders will suffer severely,” he said.
In Ca Mau, the southern most province of Vietnam, fifteen-count raw tiger shrimp is currently priced at $14.00 to $14.46 per kilo, a two-year high, according to the Vietnam Association of Seafood Exporters and Producers (VASEP). Twenty-count tiger shrimp is currently priced at $10.85 to $11.0734 per kilo and thirty-count at $6.78 to $7.00 a kilo. The increase in shrimp prices generates higher incomes for farmers, but Kich said doing business with Chinese partners posed many risks. “Chinese traders have raised prices for three years, but if one year they pushed down prices, Vietnamese farmers would suffer,” he stressed.
Truong Dinh Hoe, general secretary of VASEP, said that in principle, farmers sell shrimp to whoever offers the highest price. Even so, if Chinese traders kept buying vast volumes of raw shrimp in Vietnam, it will deal a hard blow to the local shrimp processing industry.
In 2012, Vietnam exported over $193 million worth of shrimp to China, accounting for 8.6% of its total shrimp export turnover. In the first two months of 2013, Vietnam’s shrimp exports to China reached some $31.6 million, said VASEP.