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Pangasius Report in October 2010.

In 2008, the Vietnam pangasius industry was marked by oversupply. The situation heightened toward year’s end, as demand subsided due to the global economic crisis and prices dropped even further.

In 2009, some pangasius farmers abandoned their ponds because they couldn’t break even. According to the United Nations’ Food and Agriculture Organization, the area dedicated to pangasius ponds in the Mekong Delta had slipped by 600 hectares, to 5,240 hectares, by year’s end, and 30 percent of pangasius ponds in Vietnam.

Thus, this year, there’s a supply shortfall. Though demand has rebounded, rising commodity prices have driven costs, and prices, higher. Analysts estimates another 30% of pangasius farms have suspended operation due to rising costs and lack of available credit. Today, all the seafood processing companies in the province are struggling with the material shortage.

Input prices this year have increased by $0.10 per kilo. In August, Seafood companies were collecting live whole fish at $0.91 per kilo, or 12% higher than the first quarter of 2010.

Prices, which were stable in the second half of 2009, are rising and the expectation is for a continued rise for at a similar rate for the foreseeable future. In order to make one kilo of fillet fish, processors would need three kilograms of fish. Currently, processors only receive three dollars for every kilogram of fillet fish exported. Therefore, seafood companies will not pay higher to farmers. If they buy materials at overly high prices, they will not be able to make profit.

Pangasius output reached 1-1.2 million tons sometimes. However, the output has decreased since 2008. Since the feed price keeps rising, farmers incur losses, a lot of households have given up farming. Only 2-3 households in every 10 households still keep farming, analysts report.

Source: Portunus Vietnam

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