PANGASIUS TO CHINA: OPPORTUNITIES OR RISKS?
19/03/2017
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Increasing exports of pangasius to china: Opportunities or risks?
In the recent years, pangasius hypophthalmus exports to most large markets namely US, EU and Mexico has faced many difficulties, forcing exporters to move to new markets, especially China.

Pangasius harvested at Tan Thanh Pangasius farming group, Tan Hoi commune, Vinh Long city. (Photo: Vu Sinh)
With increasing demand, the import growth of pangasius in China has rapidly increased and it is forecasted to become the largest import market of Vietnam’s pangasius exporters in 2017. However, there are many concerns when exporting to this market.
Large market niche
In the recent five years, the growth of pangasius exports to China increased from 24.2 % to 88.7% annually. In particular, the total export value of pangasius to China market in 2016 reached $US 304.7 million, up by 4.17 times over the previous five years (2012) and almost doubled compared to the previous year (2015).
As reflected by many enterprises, the demand for pangasius for domestic consumption in restaurants, hotels, school meals, and companies of China – Hong Kong increased sharply. This has encouraged enterprises to increase exports to this market.
Duong Ngoc Minh, Chairman of Hung Vuong Corporation, said that the main export markets for pangasius in 2017 are not the US but China (including Hong Kong).
Although in 2016, pangasius export turnover to the US is higher than China by 50 million USD, it is forecasted that the export growth of pangasius to China in 2017 will be up to over 30%, with more than 400 million USD.
According to Minh, the reason pangasius can survive in the Chinese market is because it mainly competing with the carp. Chinese adults and children often do not use carp for fear of bones, moreover, prices of pangasius are more suited to people’s pockets. If only one Chinese person eats one fish per year, the export of Vietnamese pangasius to China would be up to 1.4 million tons so there would be no need for another market.
On the other hand, this item is imported into the US market or the EU is merely processed in fillets, while China is a country with rich cuisine culture so the pangasius products is processed hundreds of distinct dishes.
Concerning the fears associated with over-dependence on the China market, some companies expressed that this is not worrisome. Because the demand for seafood in China is not similar to other commodities. Chinese people are gradually using fish more than meat products, due to the shrinking of aquaculture areas as environmental pollution is increasing.
Regarding shrimp products, China has many choices, buying in Indonesia, India, Ecuador, wherever having cheaper shrimp prices. However, Pandasius still now can not be replaced in the Chinese market.
China are raising carp and tilapia by themshelves, still prices are 30-40% higher than pangasius, so imported pangasius is still considered to be much more appealing.
Potential risks
Despite the large market and export potential, China is still a potential market for export businesses, especially payment.
As noted by VASEP from the business, many Chinese enterprises propose to deposit only about 30% of the total pangasius shipment, plus the average shipping price of a batch of tra fish to the border of approximately VND 45 – 47 million. When the container arrive the border gate, Chinese importers receive goods, that means the transaction is successful, but otherwise, it is considered as a loss.
Pangasius processed for export in Cao Lanh, Dong Thap province. (Photo: An Hieu / VNA)
The payment for pangasius hypophthalmus orders to China is quite diversified, however, most customers request payment in RMB or VND. This has caused the exporters many difficulties when converting to other currencies.
On the other hand, most of pangasius products are exported to China market in 2 main types: pangasius butterfly and pangasius fillet. Some Vietnamese enterprises said that it will be great if the Chinese importers agree to buy pangasius butterfly because they normally pay a good price and import large volume but if they do not buy, it will be difficult to export to any market.
Currently, Chinese partners often buy Vietnamese pangasius for processing value added products at prices that are 10 times higher than import prices. This encourages Chinese enterprises to increase their imports.
From the perspective of a seafood export business, Tran Van Linh, Chairman of the Board of Thuan Phuoc Seafood and Trading Joint Stock Company, said that market structure is very important to develop a sustainable and effective exporting industry.
Despite the rapid growth of the Chinese market, only raw materials are mostly imported. With this situation, Vietnamese businesses mainly outsource to them, while the value-added products is not unobtainable.
Not only that, Chinese traders and entrepreneurs often come to the raw material areas to purchase non-standard raw materials, causing market disturbances.
Currently, some foreign enterprises are hiring factories or processing the pangasius products in Vietnam and then transporting them by road to China for consumption through unregulated trade without being controlled. This may affect the quality of seafood exports and be unfair to exporters.
In response to this situation, Mr. Duong Nghia Quoc, Chairman of the Vietnam Pangasius Aquaculture Association, recommends that when exporting to the Chinese market, the above cases should be taken into account in order to avoid risks to the industry.
The most important thing, whether the enterprise exports to China under any trade route, , the farmer and business need to maintain the quality of fish products to avoid prices forcing, unfair competition.
17/03/2017
By TTXVN