BACKGROUND STUDY FOR GLOBAL VALUE CHAIN ANALYSIS FOR STRIPED CATFISH

BACKGROUND STUDY FOR GLOBAL VALUE CHAIN ANALYSIS FOR STRIPED CATFISH Nguyen Minh Duc Department of Fisheries Management and Development Nong Lam University, Thuduc, Hochiminh City Email

BACKGROUND STUDY FOR

GLOBAL VALUE CHAIN ANALYSIS

FOR STRIPED CATFISH

Nguyen Minh Duc

Department of Fisheries Management and Development

Nong Lam University, Thuduc, Hochiminh City

Email:nguyenminhducts@gmail.com

nmduc@hcmuaf.edu.vn

Presentation at the FAO Workshop University of Tokyo, Japan, 09-11 Dec, 2010

Brief on Vietnam fishery export

 fishery product exports have increased considerably

since 2000 to become a major income earner and one

of Vietnam’s major export commodities.

 Aquatic exports earned over $1 billion in 2000, $ 2.2 billion in 2003 and $3.36 billion in 2006

 Catfish and shrimp are by far the largest share of

aquatic exports, accounting for over 22% and 44%,

respectively, of total export earnings in 2006

 Currently Vietnamese fishery products have reached

more than 120 countries and territories on five

Vietnam's Primary Fishery Export Products in 2006

(value basis)

Vietnam's Fishery Products Export Market, 2006 (value basis)

Mekong Delta

most dynamic aquaculture region of Vietnam

The Mekong delta has 641,350 ha of

freshwater area, which comprises of 67.2%

total water surface

most diversified aquatic farming activities and great potential for increasing aquaculture

production

There are a few species, which have been

commercially produced in the Delta, such as pangasiid catfishes and black tiger shrimp

(Penaeus monodon)

Vietnamese stripped catfish is similar to US catfish

US catfish

- are Ictaluridae family,

• channel catfish (Ictalurus punctatus )

• blue catfish (Ictalurus furcatus)

farmed in closed ponds

in southern states

Vietnamese catfish

are Pangasius family - basa (Pangasius bocourti) + tra (Pangasianodon hypophthamus) + farmed mostly in pens and deep ponds

along the Mekong River, southern

provinces

 Catfish production reached 1,500,000 tons with only

6000 ha

 Farm price of catfish was decreasing during

2005-2009, around 15,000 – 17,000 Vietnam dong (~

$0.78-0.84) per kg while the price of exported catfish fillets is 2.3 USD/kg

 12% of farmers get financial loss since 2008

 However, farm price is increasing in the last months of

2010 (~$1/kg) and also exported price ( $2.6/kg) due

to lack of harvested fish.

 the farming and processing sectors of catfish industry has created 800,000 jobs for farmers in Mekong Delta and many more in inputs supplying sectors

Catfish production

Pond

culture

Catfish processing

 The striped catfish is processed mostly in frozen

fillets form for exports

 The annual export value is 1.4 billion USD

 fresh catfish is also exported but the fresh products mostly for domestic use

 The processing sector including 280 enterprises.

 Following quality standards and improved to meet global standards on quality, food safety, and

environmental conservation.

Rapid growth in catish industry

More commercial scales

< 0.05 ha

4,696 Total

16.8 24.9 23.5 17.7

7,558

16.7 17.3 28 17.3

5,459

≤0.5 ha

<0.1 ha

>0.5 ha

Supply chain in catfish industry

h farmer s

Provincial extension system Research institutions/Universities

Associations

Trade promotion Centers

h farmer

 Vietnamese catfish industry has considerably developed

since the country joined into globalization and adopted free trade principles

breeding techniques of catfish in 1998 and developed a

catfish breeding industry involving 15,000 families

and also adopted advanced feeding technologies to improve fish meat quality, meeting the quality and taste requirements

of US consumers

from an Australian importer and used processing equipments purchased from the US for their production, following the

Vietnamese catfish industry globalization

Increase in catfish exports

Prior to 1998, the time Vietnam join into APEC,

export volume of tra and basa to US market was

200 metric tons

In 2002, after the US and Vietnam signed the

Bilateral Trade Agreement (BTA), the export

volume increased to more than 8.000 metric tons

Although exporting catfish even before 1995, the tremendous spurt in exports to US came in 1999

when raw seafood tariffs dropped to zero

reached a volume of 18.3 million kilograms of

catfish to the US, which is valued at $55.1 million

in 2002 after the bilateral trade agreement between

US and Vietnam was signed in December 2001

Increase in catfish exports

Involving into trade protection

policy from the US

US labeling

Price effect of the US barriers

Labeling law

 US fillets production increased but its price still decreased,

in contrast to Vietnamese products

Unit 1999 2000 2001 2002 2003 2004 2005 Vietnam fillets price $/lb 2.04 1.52 1.26 1.29 1.21 1.15 0.93

US fillets price $/lb 2.76 2.83 2.61 2.39 2.41 2.62 2.67 Antidumping tariffs $/lb 0.64 0.61 0.49

US farm price $/lb 74 75 65 57 58 70 72

US imports from VN Mil Lbs 2 7 17 10 4 7 17

US fillets production Mil lbs 120 120 115 131 125 122 124

Since1980, US producers have been continuously seeking a trade protection

Byrd Amendment 2000 (cancelled since 2008)

allowed the petitioners in AD suits get

disbursement from tariff revenue

From 1980 to 2004, the US investigated 1092

antidumping cases of which 461 lead to a tariff

Trade effects

Antidumping measures

Effect of the US catfish antidumping with linear regression for an equation system

US price price VN demand US US farm price

Effects of AD measures on fish market shares

in US market

Imported Salmon ImportedTilapia ImportedCatfish US DomesticCatfish Antidumpin

g measures (2.37)0.036 (3.83)0.053 -0.038(3.82) -0.032(2.93)

* : Absolute value of t- ratio is in parenthesis

More info at: Hong, TTK, Duc, NM and H Kinnucan (2008)

Other non-tariff barriers from the US

Oct 2005, “Sales Ban” order in Alabama,

Mississippi, Georgia and Louisiana

May 2008, US Farm Bill 2008, catfish

quality must be strictly controlled before

imported to the US

Total exports EU Japan US

Vietnamese Catfish Exports (Unit: metric ton)

Diversification of export market

US antidumping

measures issued

There are now more strictly regulations

related to environment protection, quality control and health/sanitary guarantees

more and more non-tariff barriers to

international trade, such as anti-dumping

measures and sanitary requirements

WWF in European countries put the fish in a

‘red list’, recommend consumers not to buy for environmental natural conservation

=> New regulation and policy expected

released in 2011

Data availability

 Data for domestic value chain is not available

 Although out-up-date, may use the dataset on VN

catfish exports to study

THANK YOU!