Anchovy exports to China hurting Vietnamese fish sauce industry

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Fish sauce producers on Phu Quoc Island have been forced to downsize or face shutting down since September because brokers from central Vietnam are exporting so much of the raw anchovy supply to China.

Tran My Thuan, director of Thinh Phat, one of the major producers there, told Tien Phong newspaper that his company did not buy anchovies in September and October and had planned to scale down to 40 percent as main ingredient to fish sauce has simply become too expensive.

The price of raw anchovies has increased by threefold to VND18,000-20,000 (US$0.86-0.96) per kilo since September due to demand from China.

Several other producers have also decreased production, sold their factories, or moved on to other businesses, Thuan said.

Traders from China ordered a tremendous quantity of anchovies at a high price, leading local brokers to "willingly" raise the price, said Nguyen Minh Truc, head of the Phu Quoc District's economic department.

Every day hundreds of tons of anchovies are extracted from Phu Quoc, where about 104 fish sauce companies survive from the island's output of 30 million liters per year, according to Nguyen Thi Tinh, chair of the Association of Phu Quoc Fish Sauce.

The surge in price has "heavily affected" the industry, said Tinh, adding that factories in the past two months have processed 80 percent less raw anchovies compared to the same period last year.

The anchovy price on Monday was reported to decrease to VND9,000-9,500 per kilo, still 50 percent higher than the price before the buying rush.

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The price is still unaffordable for local producers, Tinh said.

The fish sauce chair said her association has called for local authorities to organize a team tasked with averting the massive export of anchovies to China.

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