Nov 19, 2012

Vietnam - Phu Quoc fish sauce producers cry about anchovy shortage

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VietNamNet Bridge – The anchovy price has tripled as Chinese businessmen have been collecting anchovy in big quantities, leaving Phu Quoc fish sauce producers in thirst for materials.

Thinh Phat Company, one of the biggest fish sauce producers in Phu Quoc with the annual output of one million liters, has scaled down its operation. Thinh Phat’s Director Tran My Thuan said the anchovy price has increased so dramatically, therefore, he has stopped buying materials.

“We plan to reduce the output from 100 barrels to 40. We cannot keep the current production scale, because the materials have become too expensive, while we are not sure about the sales,” Thuan said.

“We still do not know what we should do next. I have heard that other producers have also scaled down their production. Others shut down workshops, running hotels and restaurants for bigger profit,” he added.

In general, a barrel needs 15 tons of fish materials which would make out 10,000 liters of fish sauce. As such, Thinh Phat has reduced its 60 percent of capacity, or 600,000 liters of fish sauce.

The price of anchovies, the main material for making Phu Quoc fish sauce, has soared from 6500 dong per kilo to 18,000-20,000 dong per kilo since September and October.

The new price levels have been set up by the merchants from the central region, who come to the south to collect and dry anchovies to sell to Chinese merchants.

Chair of the Phu Quoc Fish Sauce Association Nguyen Thi Tinh estimated that hundreds of tons of anchovies are carried away from the Phu Quoc territorial waters every day.

Pham Thi Muoi in Dong Duong town said she is from the family which has been making fish sauce for the next three generations, but she has never seen such a sky high price before.

As an experienced fish sauce maker, Muoi has affirmed that no one would make profit with such high material prices. Meanwhile, they cannot push the sale prices up, because consumers won’t buy expensive products when they have to fasten their belt in the economic crisis.

There are 104 fish sauce makers in Phu Quoc, churning out 30 million liters a year.

“The sharp material price increase has seriously affected the fish sauce production on the island,” Tinh said, adding that the productivity in September and October was just equal to 20 percent of that of the same period of 2011.

“We have petitioned to the provincial authorities, asking competent agencies to take inspection tours in order to prevent the anchovies from being sold immoderately to China,” Tinh said.

She went on to say that while the merchants from the central region do not bear any kinds of tax when buying anchovies, the fish sauce makers in Phu Quoc have to pay five percent in tax.

When asked why the anchovy prices have increased so dramatically, Nguyen Minh Truc, Head of the Economics Section of the Phu Quoc district said the demand from China is very high, which has prompted Vietnamese merchants to raise the prices of materials they buy directly from fishermen on the sea.

On the morning of November 14, Tinh informed that the price has dropped to 9500 dong per kilo, but said that the price is still too high which is unaffordable by the producers.

Tinh also said that fish makers met anchovy suppliers, asking to apply the ceiling price at 8500 dong per kilo. However, it’s still unclear if any agreement can be reached.

Tien Phong

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