Shrimp shortage expected by end of year in Vietnam

Executives in Vietnam’s seafood industry are increasingly worried about the economic fallout of the country’s worst-ever outbreak of COVID-19.

More than 390,000 residents having contracted the virus since 27 April, with the majority of those illnesses in the country’s south, home to most of Vietnam’s aquaculture operations.

Heightened safety protocols, including lockdowns in dozens of provinces and municipalities and operational limitations on seafood processing facilities, have reduced the country’s seafood output, but now several Vietnamese executives are concerned that difficulties in carrying out farming activities and uncertainties in demand and exports will hinder the country’s second shrimp crop of the year.

Small-scale shrimp farmers, who contract to sell their product to larger seafood trading companies, are hesitating to stock their ponds, which could result in a shortage of shrimp by the end of the year, according to Siam Canadian Sales Director for Vietnam Vo Thi Tuong Oanh. And for farmers who have committed to seeding their ponds, many are facing difficulty buying shrimp feed due to a severe shortage caused by the closure of two of the country’s largest feed factories – one owned by CP Vietnam, a subsidiary of CP Foods, and the other owned by Taiwan-based Grobest. These two factories account for roughly 70 percent of the total shrimp feed supply in the region.

“Farmers worry that there is no feed for their new crop and grown-up shrimp cannot be sold because of the pandemic,” Oanh told SeafoodSource.

Due to the stocking delays, supplies from the second crop – which will be harvested in Q4 2021 – are expected to fall sharply compared to last year, Oanh said.

The problems may compound due to a shortage of shrimp fry caused by the current closure of most of the country’s hatcheries. Only a few hatcheries in the region are still operational during the lockdowns, Oanh said, but many had to dump their fries even before the lockdowns came into effect because they were unable to find buyers.

There are nearly 200 shrimp hatcheries in Bac Lieu, one of the key shrimp-producing provinces in the Mekong Delta, with a collective output of between 20 billion and 25 billion post-larvae shrimp. Difficulties are numerous even for those with product to sell – and there’s an estimated three billion post-larvae available in the province in August, comprised of 1.98 billion in Bac Lieu and 1.35 billion to other provinces. The COVID-19 situation has made it more difficult to transport the post-larvae from the hatcheries to the farms, and that problem is even larger nationwide, where an estimated seven billion post-larvae must be transported in August, according to Vietnam’s Ministry of Agriculture and Rural Development.

Minh Phu Seafood, Vietnam’s leading shrimp company by sales volume, has been significantly affected by the ongoing COVID-19 outbreak, according to Minh Phu CEO Le Van Quang. The company was forced to reduce its farming capacity by between 50 percent and 70 percent during the pandemic, Quang told SeafoodSource 26 August.

Quang confirmed the ongoing outbreak has put significant pressure on local farmers, forcing them to delay stocking in the second crop.

The Vietnam Association of Seafood Exporters and Producers (VASEP) said the country is likely to face a shrimp shortage for processing in Q4 2021 unless immediate measures are applied to encourage stocking. VASEP said prices in the fourth quarter will recover, but supplies of bigger sizes will be limited. The trade group also warned that the country risks losing the gains it has made in the global shrimp market unless the farming issues are resolved and the COVID-19 outbreak is wrestled under control. Thus far, Vietnam has grown its 2021 shrimp export value to USD 2.2 billion (EUR 1.9 billion) through July, up 14 percent year-on-year, VASEP said, with gains realized in in most major markets except China.

Sales to the U.S. were at USD 584.6 million (EUR 497.2 million) through July 2021, an increase of 34 percent year-on-year, while the value of Vietnam’s shrimp exports to the E.U. rose 26 percent to USD 320 million (EUR 272 million) through July.

Vietnam’s combined sales to countries belonging to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in the first seven months of 2021 have surged 15 percent to USD 582 million (EUR 495 million). The bloc includes Australia, Canada, Japan, New Zealand, Singapore, Mexico, Vietnam, Peru, Chile, Brunei, and Malaysia. The pact became effective for Vietnam in January 2019.

Photo courtesy of Nguyen Quang Ngoc Tonkin