Easy sales to China leave Vietnamese businesses short on shrimp

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Vietnamese shrimp exporters and processors can't find enough of the shellfish as Chinese buyers are taking all the raw shrimp Vietnam has to offer directly from farmers. 

Shrimp export revenues increased 30 percent year on year over the first 10 months and the 2013 total is expected to reach some $2.8 billion, up 27 percent, and far surpassing the target of $2.2 billion.

But members of Vietnam Association of Seafood Exporters and Processors (VASEP) said the numbers would have been even higher if so much raw shrimp hadn't been sold directly to Chinese buyers in Vietnam.

The Chinese offered higher prices than domestic buyers, pushing the price of raw shrimp in the Mekong Delta to 30-50 percent higher than normal rates.

Duy, a shrimp farmer in Bac Lieu Province, said he always sells to the highest offers. "I don't care if the shrimp are being brought to China or wherever."

Quang, a local shrimp dealer, said farmers prefer Chinese customers as they pay higher, have easier requirements for size and quality, and are willing to pay in advance.

Truong Van Phuoc, deputy director of a seafood processing company in Soc Trang Province, said Chinese dealers bought 200-300 tons of shrimp in the delta every day during the peak season in the third quarter.

"They are buying a lot because other suppliers in Indonesia, Malaysia, India, and Thailand have had a bad season."

China also surpassed South Korea to become Vietnam's fourth largest shrimp market through official export channels, importing $462 million during the first ten months, up 37 percent year on year.

But the association said the export ratio to China of 3.6 percent processed shrimps to 96.3 percent raw frozen ones was a concern.

VASEP worries that the uninhibited sale of raw shrimp to China is cutting into supplies needed for processors to make value-added exports to other markets.

Vietnam's overall shrimp export this year was 31 percent processed and 69 percent raw.

Phuoc said local exporters are only managing to buy around 20-30 percent of what they need to meet export contracts.

Thus they only dare to sign small contracts, one by one, he said.

A source from VASEP said many processors have failed to finalize contracts with customers they've had for years and years.

Tran Thien Hai, chairman of VASEP, said there was nothing wrong with Chinese dealers buying a lot of shrimp. But he worried the trend could cause a problem in the long wrong.

"Shrimp is Vietnam's leading prestigious export. Chinese dealers buying so much, regardless of quality, could cause the farmers to be easy with themselves and lower their quality.

"When Chinese cut or stop their purchases, our shrimp might not be able to be accepted by picky markets like Japan, US, or EU."

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