Fear of raw material shortage for export production

Handle violations in export production and processing

Processing pangasius for export at Can Tho Seafood Import-Export Joint Stock Company. Photo: VNA

Meanwhile, fishery materials mobilized for processing and export only reach about 40-50% compared to external raw materials due to the implementation of social distancing measures.

In the last months of the year, there will be a shortage of 20-30% in terms of breeding stock and import sources.

Risk of raw material shortage

According to the Vietnam Association of Seafood Exporters and Producers (VASEP), when the Covid-19 pandemic broke out in Ho Chi Minh City and spread to the Mekong Delta, fish farming, transporting raw materials to factories, and processing plants also faced difficulties. This may affect pangasius chains and raw material prices in the near future, affecting pangasius export turnover.

For factories that are allowed to operate, the number of workers that can be mobilized is only 30-50%, the rest must quit or take unpaid leave. This makes the average production capacity fall to only 40 - 50% compared to before.

Currently, both pangasius farmers and exporters are very worried about the prevention of the Covid-19 pandemic, the price of pangasius raw materials is expected to have a big fluctuation affecting exports.

According to VASEP, the entire Mekong Delta has about 120 pangasius production facilities, with nearly 3,000 hectares of pangasius rearing.

This is a farming area with an abundant amount of raw materials for export. In the first half of 2021, the price of raw materials increased 3-4 times, essential items for the processing factory also increased from 5-25%; the price of aqua feed also increased by 15-20%, not to mention the increase in sea freight from 5-7 times.

According to Ms. Truong Thi Le Khanh, Chairman of Vinh Hoan Company (Dong Thap), pangasius processing companies are facing difficulties in purchasing raw fish because they have to buy and gather in many different locations. Harvesting workers find it difficult to move due to the strengthening of disease control measures.

It is expected that the source of raw materials for seafood export production in the last months of the year will be in short supply. Therefore, in a recent dispatch to the Prime Minister and the Minister of Agriculture and Rural Development, VASEP urgently proposes to prioritize vaccination for the workforce at factories that are applying the "3 on-the-spot" model.

VASEP believes that if we immediately vaccinate workers at seafood processing factories, we will both keep markets and export partners, and maintain production and jobs for many workers, including farmers, fishermen, marine exploitation and raw material production.

Ensuring the source of input materials

In order to create a complete product in addition to the main raw materials, manufacturers must import from many suppliers with different types of raw materials. According to Ms. Ly Kim Chi, President of the Food and Food Association of Ho Chi Minh City, in the current situation, the possibility that these suppliers may stop operating when an F0 case appears is possible at any time and if a certain type of raw material cannot be imported, the production enterprise may have to stop operating.

Some enterprises have proposed auxiliary materials such as spices, flavorings, additives, allowing enterprises to find other substitutes or adjust to increase or decrease the content, while ensuring that it does not affect quality, safety and basic characteristics of the product, and the company makes a commitment that this adjustment does not affect the health of consumers.

However, according to the Law on Food Safety and related regulations, with the above adjustments, enterprises need to redo procedures for self-declaration of products and change the current packaging.

Usually this takes a lot of time and it will take even more time if re-printing the packaging, so costs will be very high, the old packaging that has to be discarded will be very wasteful.

Therefore, the possibility that enterprises will have to suspend production is very high. In the current context, we are looking forward to flexible solutions from the management agency. Therefore, it is proposed to replace the above procedures by sending detailed written reports to relevant regulatory agencies and transparent information to consumers, so this option to adjust additional materials is only a temporary solution.

In order to ensure the supply chain of input materials for the food and seafood production industry, especially when the Covid-19 situation is evolving, Ho Chi Minh City must calculate and soon promote stronger cooperation between the city government and the authorities of the provinces with large raw material areas that currently control the pandemic well like Lam Dong, Binh Phuoc and Ca Mau, through meetings of the two sides to come to an agreement on making common commitments and jointly implementing actions, Ho Chi Minh City will propose market demand, and suggest provinces to commit to expanding production scale and increasing the output of raw material areas according to each locality because the main source of raw materials for the food production industry in Ho Chi Minh City is mainly from neighboring provinces.

Stabilizing the source of production materials as well as domestic reserves is more important than ever to ensure production, fully supply consumer demand for people according to the direction of the city, contributing to Ho Chi Minh City's fight against the pandemic.

Therefore, the Chairman of the Food Association of Ho Chi Minh City proposed that the city propose the State Bank to add specific businesses to the beneficiaries of new loan policies, exemption and reduction of loan interest rates, speeding up the process and time of disbursement of loans from the State so that enterprises can supplement capital sources to reserve raw materials, auxiliary materials, finished products, contribute to stabilizing the market, ready to meet demand of consumers.