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While US, European pangasius markets sputter, China and Japan rev up

Prices firm as Asian nations start ramping up their purchasing from Vietnam. 

Vietnamese pangasius producers and exporters are facing significant obstacles in two of their biggest markets --  the United States and Europe -- but emerging markets in Asia might just save the day. 

With retailers pulling the product from shelves in parts of Europe, recurring bad press and the United States ramping up import restrictions, China and -- more surprisingly -- Japan are stepping in to pick up the slack.

According to Bowie Leung, director and Vietnam country manager at Siam Canadian, demand from the European market has been dropping about 10 percent every year in recent years and is widely regarded as a challenge -- especially since the decision by Carrefour and other retailers earlier in the year.

This move had an impact in southern Europe  mainly, specifically Spain, a very big market for pangasius.

“The Vietnamese are certainly feeling the impact from that,” said Rens Elderkamp, manager of strategic sourcing at Anova Seafoods.

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Elsewhere in Europe demand appears stable for the moment, and in fact it is slightly growing in places such as Holland and Belgium “strangely enough,” Elderkamp said.

“We expected it to go down a little bit further as it has been the past couple of years, but we see an increase in sales, so that’s good,” he told IntraFish.

This shift might have to do with high salmon prices, as the major retailers in Holland, for example, have pushed up consumer pricing on salmon quite aggressively since the beginning of the year. 

“If you have to pay €7 ($8.24) for a salmon portion you have to start looking for alternatives as a consumer, pangasius is an alternative as it’s an easy accessible fish and there are no real cheaper salmon alternatives available,” said Elderkamp.

License to enter the US

The US market, too, continues to be challenging for pangasius suppliers, particularly because of stiffer trade barriers. 

The US Food Safety and Inspection Service (FSIS) recently said all imports of pangasius, into the United States should undergo re-inspection by FSIS staff from Aug. 2 onward -- a move which means extra costs for pangasius exporters in Vietnam.

“Of course, it’s a new situation but the effects of it are still not clear yet,” Elderkamp said.

Every single container -- in fact every single box -- entering the United States is now checked and stamped, he said. “That’s lot of work and will mean every single container will cost an estimated $7,000 (€5,949) extra just for this check once it enters the US," he said.

“They are just checking containers, stamping boxes, so not really adding any value -- it’s just a license to enter the US, basically.”

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However, while $7,000 (€5,949) is a large amount of money, on 20 metric tons of fish it’s about 25-30 cents. And although with pangasius that is still a major part of the price -- and a 10 percent extra cost -- it should not impact consumption too much.

“I don’t know how prices sensitive the US consumers is, but usually a 10 percent price increase doesn’t normally lead to a huge decreased in consumption - but that remains to be seen,” said Elderkamp.

Rise of Japan

But while Europe and the US have their challenges at the moment, China and Japan are emerging as welcoming and growing markets for Vietnam's famous fish export.

“Luckily with the fast growing of the China market, becoming the biggest market for pangasius, the growth is big enough to cover the loss of EU market,” said Leung.

Elderkamp agrees. “China -- in any fish -- is quite aggressive and getting stronger and stronger,” he said. “It seems the Chinese have discovered pangasius as a cheap and good fish and use it a lot in street food.”

Japan is actually quite a new market for pangasius, but it is buying quite strongly at the moment. One reason for this could be the lack of eels or unagi available, which is forcing the Japanese to look for alternatives.

“Pangasius, if you marinate it right, is a pretty good alternative and cheaper as well of course,” said Elderkamp.

The quality of pangasius going to Japan is quite high and everything is untreated and needs to meet certain levels.

“On the other hand it is a good sign for the Vietnamese industry that Japan is looking at it and actually buying it – it’s a good reference to have if the Japanese buy your product,” said Elderkamp.

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