Vietnam pangasius prices to keep rising into new year, say sources : Nov 23, 2017
Neil Ramsden : Undercurrentnews
Prices for Vietnamese farmed pangasius continue to rise in November 2017, and are expected to continue to do so, several sources agreed.
They peaked early in September, on limited availability of raw materials, and stabilized for a time at $2.55 per kilogram, delivered to the EU freight-on-board from Ho Chi Minh City.
In mid-November trading company Siam Canadian Group said that raw material prices continued to move up. Frozen suppliers saw prices climb from VND 26,000 in 2016 to VND 28,000 during the Vietfish 2017 expo in August 2017, then to VND 29,000 after the China Fisheries & Seafood Expo in Qingdao, early November.
Most recently that increased a little further, to VND 30,000/kg. “Pangasius exporters in Vietnam and frozen seafood suppliers worldwide expect prices to continue to move up,” said Siam Canadian.
One EU importer, and a Vietnamese processor and exporter, confirmed to Undercurrent News that prices had reached $2.70/kg 100% net weight, standard glaze.
“Premium quality, untreated product is $3.80, $3.95/kg,” the exporter added. “There’s not much stock around at the packers, it’s coming in and going straight out again.”
He attributed rising prices to a combination of factors. “It’s partly demand from China, and partly a broodstock shortage. There’s not a lot of fry or fingerlings in the supply chain at the moment,” he said.
“It’s been prematurely cold lately too, fish are growing slower; the average daily growth rates are maybe 7-9% below normal.”
Demand from China — which earlier in 2017 became Vietnam’s largest market for pangasius exports — is across all product lines, he said. However, he’s not sure this situation is set to last.
“Not to be pessimistic, but we’ve seen this before. China can get into a new product, go hard, then it finds other channels once that one is full.”
He predicted demand, and prices, would be firm until Chinese New Year — Feb. 16, 2018 — and after, that business would become less consistent there.
Prices still are not up where they were in 2012, he said, although Undercurrent’s prices portal shows November 2017 prices are on a par with those seen in early 2014; the highest for which the graphs contain data.
Undercurrent’s prices portal showing prices now are peaking at levels they reached in 2014
“European customers are a little freaked out,” the export source said. Previously Undercurrent had been told some importers in Spain had suggested they might look to alternative species.
“Spain is still buying, and still complaining,” he said. “European buyers are shopping around for deals, but they’re not swapping out for new species yet.”
“We’re encouraging them to make deals now, as there’s no guarantee later in the year there’ll be fish of the sizes they want. Many farmers here are growing fish larger, for China.”
He thinks prices will continue to rise until after Chinese New Year, estimating that untreated, premium product could climb to $4.00-$4.05/kg.
The EU importer noted his firm was not looking at alternative species, but was now mre hesitant to close long-term orders.
‘Mostly settled’ to the US
Meanwhile, the US too faces continued price rises. Don Kelley, procurement manager with US importer Western Edge Seafood, told Undercurrent prices were up, and now “mostly settled” at $2.00-$2.10 per pound, delivered duty paid plus inspection costs.
“We are not meeting resistance to the price at this time, but I will not be surprised to start to feel some fatigue in the market after Lent buying is more set,” he said.
In terms of Vietnam’s ongoing political issues regarding trade with the US, the Vietnamese exporter noted the issue of a blanket anti-dumping tariff across nearly all those selling to the US from March 2018 was brought up at the recent Asia-Pacific Economic Cooperation summit with US president Donald Trump.
As for the race for Vietnam to gain US Department of Agriculture equivalency — in order to be able to sell to the US come March 2018 — individual companies have not yet received audit dates for their equivalency checks, the source said.
“I think most of the companies are ready, to be honest. There’s several making small investments now in some of the points that will be checked, like animal welfare during transfers between boats and ponds, that sort of thing.”
Both Vietnam as a country, and each company hoping to export to the US, needs to pass a USDA audit to gain equivalency, since this government body took over responsibility for pangasius imports from the Food and Drug Administration.
“This is an institutional thing, the DoC [Department of Commerce] has just made some mistakes which I think will get straightened out,” the export source has said previously. “You’ve got to have faith in that system. The equivalency issue is more of a tight timeframe – these things don’t happen all that fast, and March is only a few months away.”