[Industry news] New decree expected to shift the pangasius industry onto a more sustainable path

Jul 01, 2017

According to U.S. Farm Bill, starting from Sep 01, 100% of the Vietnam pangasius shipments to the U.S. will be inspected by FSIS. In May 2017, the Ministry of Agricultural and Rural Development-(“MARD”) promulgated the Decree No. 55/2017/ND-CP (“Decree No.55”) to regulate the pangasius sector. The exporters anticipated that the newly effective Decree will shift this billion dollar industry onto a more sustainable path.

During recent symposium on pangasius sector sustainable development solutions and implementation of Decree No.55, Mr. Vu Van Tam-Deputy Minister of MARD-said despite positive signs, pangasius sector still falls behind in sustainability trend. To meet with new requirements, many phases in the sector need to be restructured, from breeding, fish feed production, farming procedure, processing procedure, glazing and moisture limit, etc,..to export criteria and conditions.

MARD has consulted with the Government on the enactment of Decree No. 55 effective from July 01, 2017 to sustainably develop the pangasius sector.

The Decree is unique in the way that it does not need the guidance circular and can be executed immediately as the MARD had previously promulgated the National Technical Standards for Frozen Pangasius Fillets.  The standards would pave the way for farmers, processors, and exporters to comply with the highest regulative requirements and eliminate those enterprises whose dishonest operations had impacted negatively on the reputation and quality of the Vietnam pangasius.

Decree No. 55 replacing the controversial Decree No. 36/2014/ND – CP, has received a broad consensus in the industry.
According to Vietnam Directorate of Fisheries, in first half of 2017, the pangasius export value recorded a 2.7% rise year-on-year. In Mekong Delta, farming area and harvest volume reached 3,100ha and 519,260MT, up 1.3% and 2.2% respectively year-on-year.

Most farmers and processing companies made profits thanks to increasing raw material price, in which farmers gained VND 4,000-6,000 per kg.

However, it is forecast that in Aug, Sep, and Quarter 4/2017, the processing plants will be short of materials as a consequence of declining farming area in first quarter of 2017.

Demand from fast-growing markets such as China and Hong Kong is surging, hence the supply-demand gap is expected to widen.

MARD is promoting the implementation of National Product (Pangasius) Framework, focusing on 2 product lines with forecast annual revenue of VND2,000 billion.