Vietnam’s seafood industry reeling from COVID-19 outbreak

A COVID-19 outbreak in Vietnam is having a marked impact on the country’s seafood industry, with the processing capacity of shrimp and pangasius facility reduced by half and panic-harvesting taking place the country’s Mekong Delta region.

Vietnam was able to successfully contain the spread of COVID-19 last year while its competitors in seafood production, including India, Indonesia, Ecuador, and others, struggled with massive outbreaks. Vietnam’s seafood companies took advantage of that opportunity to boost exports.

Vietnam’s General Department of Fisheries said on 16 July the shrimp sector benefited from the successful containment of the pandemic from early 2020 to the early months of this year. However, shrimp prices have been on the decline over the past two months due to the rapid spread of COVID-19 in the country’s southern provinces. Since 27 April, more than 52,000 people in Vietnam have contracted COVID-19, most in the country’s south. In comparison, between early 2020 and April 2021, Vietnam’s cases totaled less than 3,000, according to government data.

At the center of the current outbreak is the Ho Chi Minh City region – Vietnam’s main gateway for seafood exports – and the Mekong Delta, the country’s key region for seafood production. More than 32,000 Ho Chi Minh City’s residents have contracted COVID-19 since 27 April, and in response, the city’s government recently imposed a strict two-week lockdown beginning on 9 July.

Starting 19 July, 16 other southern localities including the entire Mekong Delta also applied similar lockdowns for 14 days in an effort to contain the spread of the virus. During the lockdowns, factories and farms are still allowed to operate but their workers must work, eat, and sleep within the plants and farms and completely isolate from the public and their families.

Ho Quoc Luc, the chairman of shrimp exporter Fimex, said in a statement on 16 July he is unsure when the current restrictions on the factories and farms will be lifted, but an easing of the strict protocols put in place by the government will not be removed until there is a demonstrated containment of the current COVID-19 outbreak.

Fellow shrimp producer and exporter Minh Phu Seafood cut its processing capacity in half due to limited housing capacity at its facilities, CEO Le Van Quang told SeafoodSource on 19 July.

An official at a pangasius company in An Giang Province said capacity at processing plants in the region has been reduced by about 40 percent, due to the fact that local factories are unable to house more workers.

Meanwhile, fearing the market disruption will cause prices to fall, many farmers in Mekong Delta have opted to harvest their current crop early. In Ca Mau Province, officials have urged farmers to stay calm and opt against panic harvests, the province’s deputy chairman, Le Van Su, said in a statement on 13 July, following a meeting between government officials and seafood companies in Ca Mau.

Nevertheless, in Tien Giang Province, panic-harvesting have sunk prices significantly. Ngo Minh Tuan, who operates 30 hectares of vannamei farms, said the average farm-gate price for a kilogram of 30-count shrimp was VND 130,000 (USD 5.60, EUR 4.80), down from VND 155,000 (USD 6.70, EUR 5.70) three weeks ago. Prices have been affected by the fact that shrimp processors are now unable to purchase and process the suddenly high volume of shrimp being harvested, according to Nong nghiep Viet Nam newspaper. Ngo said this was frustrating because foreign demand for Vietnam’s shrimp remains strong.

The lockdown is also affecting Vietnam’s importation of seafood for processing. According to Vietnam Association of Seafood Exporters and Producers (VASEP), in order to reduce costs, many local companies stored their recent import cargoes at their own storage facilities instead of keeping them at port facilities as a cost-saving measure. However, port health inspectors have stopped inspections of cargoes outside of port areas and said they will resume full operations only once the current outbreak is brought under control. VASEP has asked the Ministry of Agriculture and Rural Development to intervene so processing and exporting won’t be disrupted, but the two sides had not yet reached a resolution as of 19 July.

In another move, the government on 18 July directed provinces and cities under lockdowns to lift a rule that requires drivers of all container trucks and lorries to show a negative result of a COVID-19 test before being allowed to enter the localities. The clampdown, put in place without warning earlier this month, had surprised many local seafood companies and caused disruptions in seafood transportation between Ho Chi Minh City and the Mekong Delta

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