Vietnam Pangasius, supply and markets
Ms Hoa (Chau) Phan

Ms Hoa (Chau) Phan, Sales Manager Vinh Hoan Corp.

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Vinh Hoan is the leading pangasius producer and exporter in Vietnam and globally. After 21 years of development, we now operate three major divisions.

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Our VA division manages nearly 600ha of farming area and over 300 ponds to supply internally. All of them located in prime upstream areas with superior water quality and river logistics to our production facility. The division serves as the backbone in agritech, efficiency and safety leadership.

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Our VF operates three production clusters and a processing capacity of 800 tons of raw fish per day. Together, they house the majority of our ~7,000 employees. Two of the three clusters were recently acquired and renovated in 2017 and 2018. The last cluster is undergoing incremental renovation. In our upgrades, we seek to rationalise the production line arrangement based on future business needs and increase operational efficiency based on new technologies and what we have learnt over time.

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Our VW division is proud to be the first and only Vietnamese company. We produce 2,000 tons of hydrolyzed collagen and gelatin extracted from pangasius fish skin annually. Furthermore, it was highlighted last month with the launch of a new skincare supplement in Sweden using our wellness product, the world’s first ASC certified collagen product.

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Pangasius is considered as a popular whitefish consumed globally, besides Alaska Pollock, Cod, Haddock and Tilapia. Although these tables were from 2016 data, since then, the ranking maintains quite stable despite changes in supply availability and pricing over the years. It’s simply because each fish has its unique taste and profile which is suitable for a certain recipe, thus, chefs and consumers all around the world don’t easily change their choices unless it was a major disruption. 

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Vietnam by far is the dominant exporter of pangasius, accounted for around 90% of global export. Since 2015, Pangasius production from Vietnam has increased at a stable growth rate of 5-7% annually. It’s expected this rate will maintain throughout 2019 and 2020.

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In the first 6M of this year, VN earned nearly 4bil USD from seafood export (down by 2%) and Pangasius was accounted for 25%. Speaking of Pangasius, the fish was exported to over 123 countries worldwide with over 962 mil USD, decreased 4% YOY. Top 8 markets listed on the chart are accounted for nearly 80% total export value.

Before getting into the details, let’s take a look at how these 4 main markets doing over the past decade. We can see China had a spectacular growth since 2015 as the fish was first introduced at many major restaurant chains and online platforms and very well-accepted by the consumers, then we have the US with some ups and downs but the sales spiked significantly in 2018 which I will explain in a later slide. Next, we have EU where the sales plummeted over the years due to the attack of negative media but started to pick up in 2018 as a good sign of recovery. And last but not least, we have ASEAN growing slowly yet stably over the years. Overall, we experienced an increase in the main markets in value term.

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China‘s sales reached 254 mil USD in the first half of 2019, increased by 1% YOY. However, Vietnam is still the 3rd largest white fish exporter to China after Russia and Norway.

Last year, China’s demand continued to grow at 30-40% while supply remained more or less the same. This placed upward pressure on RM pricing, especially in the second half of 2018.

In the first half of 2019, sales to China was stagnant due to tightening border trade and quality control measures from both Chinese and Vietnamese governments. However, since June, it has rebounded with a double-digit growth rate. Now, as companies have caught up to the new requirements, exports will continue to increase strongly in the second half of 2019 and 2020.

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Slow sales in the US was caused by 2 factors: Firstly, US importers took the wait-and-see approach up to the….

Back in the 2nd half of 2018, the US importers took heavier and longer procurement position due to the concern of supply shortage, therefore, needed time to digest its excess inventory in the 1st half of 2019. This practice played a big role in the spike of 2018 export value mentioned in one of the previous charts.

Overall, we expect to have steady demand this year and next year from the US.

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Particularly in Q2.2019, Pangasius export value to Germany and UK increased approx 40% YOY. Overall, Pangasius experienced an improvement in consumer confidence in food safety and sustainability level, promising a bright future for the fish in this region. On top of that, the EU – Vietnam Free Trade Agreement (EVFTA) were signed on in June, which will remove tariff to the EU from 5.5% over 3 years. It’s expected to be rectified sometime this year or next year.

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Although farmers and producers became more professional with production planning based on market demand, there are actions needed in order to optimize the production plan for the industry’s sustainable development, such as:

  • Need better assessment on procurement approaches, for instance, buyers tend to wait for market adjustment after a sharp increase in price.
  • Need systematically accumulated data to assess the impact from the previous period.
  • Need better and more centralized fingerlings production plan…

by applying effective statistical technology with easy access.

As China will continue to be the main driving force for the development of the Pangasius industry, the government needs to tighten border trade business and strengthen quality control to maintain steady growth à

As export to the EU has increased by nearly 20% this year, it’s a good time to establish market development fund for the industry to maintain this growth and gradually regain market share in the EU.