Vietnam's prolonged lockdown, the impact on seafood businesses, and finding a way out

In the Mekong Delta provinces in Vietnam, 120 out of 449 seafood processing factories has ceased production, and the remaining factories are working at only about 30-40% capacity.

Mr. Tran Dinh Luan, General Director of Vietnam's Directorate of Fisheries, said seafood exports in August 2021 dropped sharply; seafood products like tuna, pangasius and shrimp decreased by 29.7% compared to the previous month. However, by August of 2021, seafood export turnover reached over 5.6 billion USD, up 7.1% over the same period last year.

An online meeting was held on September 4th by the Ministry of Agriculture and Rural Development to report on the current hardships the seafood industry is facing. Some main difficulties raised were attributed to insufficiency of local raw material for factories, drop in seafood prices, lack of traders and harvesters...

Mr. Nguyen Van Buoi, the Deputy Director of the Department of Agriculture and Rural Development of Ben Tre province, suggested the government to introduce a policy to reduce interest rates on bank loans, and requested government subsidy in electricity bills for high-tech aquaculture farmers, which accounts for 1950 hectares of shrimp farms in the province.

Mr. Nguyen Hoai Nam, the Deputy Secretary General of Vietnam Association of Seafood Exporters and Producers (VASEP), identified the 4 major problems which needs to be addressed:

1. 70% of factories in the southern provinces has ceased production, and in the remaining factories only 20-40% of workers are going to work
2. The continuous extension of lock-down measures can lead to irreversible loss of export customers
3. The scarcity of raw materials caused by travel restriction policies between localities
4. The pressure of cost: businesses still pay for workers that are not working and for those coming to factories, on average unit production cost has increased by 1.5 times

Ministry of Agriculture and Rural Development's Deputy Minister Mr. Phung Duc Tien stressed the importance of the seafood industry to Vietnam's economy, which accounts for about 35% of the value of the agricultural sector and stated the vaccination plan for workers in the industry are of top priority. Mitigation plans are being developed to address the funding and transportation concerns to ensure the industry will reach 2.9 million tons of seafood in the remaining months of the year, achieving the targeted 8.6 million tons in 2021.

The source article on VnEconomy can be found here.