Just a dispatch, seafood enterprises "breathe a sigh of relief"

Import material resources play an increasingly important role for seafood companies. Photo: Nguyen Thanh.

Single loss, double losses

Hai Phong Joint Stock Company of Seafood Import-Export and processing often import seafood products from markets like China, Korea, Taiwan ... via Haiphong seaport. On average, the company imports a batch of about 50-100 tons per week. Talking to Customs newspaper reporters, Ms Bui Kim Quy, an employee of the Company, said: Each time of importing, the goods are stored at the port, waiting for quarantine results of the Animal Health agency then clearance and release. On average, if It's fast, goods will stay at the port for about 3 days. In some cases when the criteria require multiple and complex quarantine, pending the results of quarantine, it may take 5-7 days.

Because imported goods must be cryopreserved in suitable temperature conditions, businesses have to pay for electricity. The cost of electricity is currently around $US 20 / hour. So, if to save about 100 tons of goods at the port for 4 days, the cost adds up to 4-5 million VND. This was not in accordance with current regulations that containers are free to be stored only for 3 days. For extra days, companies will also be charged additional costs at the port for container storage, not only for electricity, she said.

Ba Ria-Vung Tau Joint Stock Company of Seafood Import-Export and processing also as one of the enterprises struggling with regulations to be stored at the port during the pending results of veterinary quarantine. According to the information that this company and several other companies sent to Vietnam Association of Seafood Export and processing (VASEP): The quarantine of imported raw seafood materials for goods export production of frozen containers not only makes a large inventory and demurrage costs, but also affects the quality of frozen goods by not regularly checking the condition of cryopreservation.

Related to this issue, Ms. Quy adds: There were cases of unfavorable weather, such as hurricanes which led to power outages so that the cold storage container is not guaranteed. This also makes businesses lose out and affect their reputation by using raw materials with diminished quality.

Initiative business

Before the practical difficulties of enterprises, on 30-8 2016, VASEP wrote an official dispatch number 137/2016 / CV-VASEP to the Department of Animal Health, (Ministry of Agriculture and Rural Development ) which recommended the Ministry consider allowing enterprises which have a good history of complying with regulations on quarantine to put import seafood raw material in preservation warehouses of their own storage facilities while waiting for the results of veterinary quarantine. In addition, VASEP also suggested the Ministry to consider applying risk control mechanisms in import controlling based on the observed history of enterprises and the origin of goods to be able to be classified by Customs authorities (Green -Yellow-Red), avoiding 100% enforcement inspection of the import batch as is currently required.

After the process of reviewing, on October 24, 2016 the Ministry of Agriculture and Rural Development issued an official Dispatch No. 8938 / BNN-TY DN which agreed to allow enterprises to put imported frozen seafood products as raw materials for export production in their storage facilities (storages qualified for veterinary hygiene), and perform the prescribed quarantine. In particular, the Ministry of Agriculture and Rural Development stated: companies are solely self responsible for goods preservation and goods are not to be put into use without quarantine results. If the quarantined shipment results are unsatisfactory, enterprises are not allowed to use these goods as raw material, and must strictly implement the treatment of unsatisfactory shipments prescribed.

According to Mr.Truong Dinh Hoe, VASEP General Secretary : This decision of the Ministry of Agriculture and Rural Development makes an important contribution to reducing congestion, difficulties in inventory control and warehousing costs for seafood import businesses. Representatives of many Export and import seafood enterprises expressed excitement about this decision that will impact directly and quickly to enterprises, not only helps them save costs but also to be able to use more initiative when calculating business, balancing profit and loss.

The enterprises explained that, imported raw materials derived mainly from two factors due to lack of raw materials in the country or import prices are more competitive than domestic goods. Particularly, imported shrimp products from India, and Ecuador foe example, for export products processing, businesses will be more beneficial in terms of price than using domestic raw materials for a difference between $US 1- 2 / kg depending on type. However, it is when enterprises are allowed to bring imported goods to warehouses of enterprises for quarantine pending results. When Enterprises had to store their goods at the port waiting for quarantine results before bring their goods to warehouses, the price difference does not cover the cost of storage and maintaining temperature for containers that enterprises must spend. Just a change in the decision of the Ministry of Agriculture and Rural Development has affected the decisions by enterprises to import raw material or not.

According to the Ministry of Agriculture and Rural Development : The estimated value of imported seafood products in the first 10 months of 2016 reached 878 million VND, decreased by 3.2% compared to the same period in 2015. The largest import seafood market in the first 9 months was India (25.8% share), followed by Norway, Taiwan (China), Japan and China with a share of respectively 9.7%, 9.3%, 6.1% and 5.9 %.

The markets which increased in value over the same period in 2015 are Indonesia, Norway, Taiwan (China), China and Russia with increased value respectively of 56.5%, 32.5%, 16.6% , 7.7% and 6.7%. The markets which decreased in value over the same period in 2015 were Chile (decreased by 27.9%), India (decreased by 26.4%), the US (decreased by 24.6%) and South Korea (decreased by 17,1%).