Shrimp prices have gone up due to shortages caused by drought and saltwater intrusion and in the long term this is not good news at all.
Vietnam’s southernmost province, Ca Mau, its biggest seafood area, saw nearly 3,000 ha of shrimp damaged by saltwater intrusion and drought in the first three months of the year. More than 8,000 ha of shrimp have been similarly affected in nearby Kien Giang province. A representative from the Ca Mau Department of Agriculture and Rural Development said that if the situation continues the damage will become even greater. Drought and saltwater intrusion are having a major impact on local fisheries production in Mekong Delta provinces and exports are also expected to be hampered in the time to come.
Aquaculture area shrinking
According to figures from the General Department of Irrigation under the Ministry of Agriculture and Rural Development (MARD), the damaged aquaculture area stands at 3,771 ha. Ca Mau is the worst affected, with over 70 per cent of its aquaculture area damaged, followed by Tra Vinh and Ben Tre with over 30 per cent of their area damaged. Eight of the 13 provinces in the Mekong Delta have declared a state of disaster due to drought and saltwater intrusion: Kien Giang, Long An, Ca Mau, Tien Giang, Vinh Long, Ben Tre, Soc Trang and Tra Vinh.
Almost the entire planning area for brackish water shrimp has been affected by salinity, especially aquaculture areas downstream of the Hau River, in Ben Tre, Soc Trang, Tra Vinh and Kien Giang provinces. The risk of the aquaculture development plan falling apart is pressing.
Many people in the Mekong Delta remain wary and are unwilling to proceed with their usual farming schedule. The area now under aquaculture is estimated at just 50 per cent of the plan. Mr. Nguyen Van Nhiem, Chairman of the My Thanh Shrimp Association in Soc Trang province, told VET that farmers are facing a host of difficulties due to climate change. “The shrimp farming area has been narrowed, with only 5 to 10 per cent remaining,” he said.
Despite suffering from drought and saltwater intrusion, total fishery production during March was over 441,000 tons, a 2.3 per cent increase against the same period last year. According to the Vietnam Association of Seafood Exporters and Producers (VASEP), fishery exports in the first quarter reached $1.4 billion, up nearly 9 per cent year-on-year. In the context of a serious decline in the agriculture sector, the results in the first quarter are positive news.
Shrimp is considered the main driving force in promoting export growth. The shrimp export value in the first two months was $378.4 million, up 8.5 per cent against the same period last year. In particular, shrimp export prices have risen 4 to 5 per cent, according to figures from VASEP. In talking with VET about the sudden increase, Mr. Nguyen Do Anh Tuan, Director of the Institute of Policy and Strategy for Agricultural and Rural Development at MARD, said it was also a positive sign for fishery exports. “The price has increased due to changes in supply and demand,” Mr. Tuan said. “Supply is decreasing due to drought and salinity while demand among consumers has not changed.”
Tough times ahead
Despite the positives the challenges for the fishery sector remain huge. It is expected that the total aquaculture area affected will continue to expand in the future as saltwater intrusion shows no sign of abating. Mr. Nhiem said that, in a normal year, any increase in the shrimp price depends on seasonality. “The price increased this year due to severe weather, drought and saltwater intrusion, which causes farming processes to change,” he explained.
A shortage of raw materials for fishery processing will be the greatest challenge in the time to come. According to Mr. Ngon Thanh Linh, General Director of the Ca Mau Association of Seafood Exporters and Producers, processing capacity in the province is large but raw shrimp supplies meet just 50 per cent of demand. If the weather continues as is, in a month or so many seafood processors will be in a serious predicament from raw material shortages.
The director of a fisheries company who is also a member of the Ca Mau Association of Seafood Exporters and Producers said his company’s shrimp processing plants are constantly short of raw materials. Although the company has more than 350 ha of raw material area it can only meet about 30 per cent of processing capacity. The company itself has had to refuse some supply contracts. Many processing enterprises must accept buying shrimp at prices much higher than normal, but can only buy a maximum of 20 to 30 tons.
Mr. Truong Dinh Hoe, General Secretary of VASEP, said that normally, in the early part of the year, fishery enterprises face many difficulties from a scarcity of raw materials and seafood export value in the first quarter of the year is at its lowest. “At this time we can’t say for certain whether this year’s seafood exports will increase or decrease,” he was quoted as saying.