VietNamNet Bridge – Seafood companies have begged the State Bank of Vietnam (SBV) to allow them to borrow money in foreign currencies until the end of 2013 to help them overcome the current difficulties.

In fact, seafood exporters once got the favor from the central bank which agreed to delay the enforcement of the Circular No. 03 on allowing businesses accessing foreign currency loans until the end of December 2012. However, they do not think this is enough.

The Vietnam Association of Seafood Exporters and Producers VASEP has proposed the central bank to delay the enforcement once again, but it has got no reply from the bank which has shown its strong determination to stop the lending and borrowing in foreign currencies in Vietnam.

VASEP’s Chair Tran Thien Hai said seafood companies have been in a critical situation and they need any possible measure to help them escape from the current difficulties.

Hai said if Vietnamese enterprises cannot borrow money in foreign currencies at low interest rates, Vietnamese seafood exports would not be able to compete with regional countries. Thai and Indonesian businesses, for example, can borrow foreign currencies at the low interest rates of 3-5 percent. Meanwhile, Vietnamese have to borrow dong at the sky high rates of 11-13 percent.

It seems that seafood companies have been on tenterhooks because they have not got the nod from the central bank yet, while the central bank keeps calm.

VASEP’s Secretary General Truong Dinh Hoe said if seafood companies can access foreign currency loans at low costs, they would be able to improve their competitiveness to rescue themselves in the difficulties.

A report showed that by mid November 2012, Vietnam’s seafood export revenue had reached 5.3 billion dollars, or 900 million dollars lower than the level of 6.18 billion dollars projected for 2012. Of this, catfish exports have brought 1.5 billion dollars only, or 300 million dollars lower than the predicted level.

The unsatisfactory seafood export has been attributed to the tightened credit in Europe which has made it more difficult for European importers to access credit to import goods, and the Ethoxyquin barrier installed in the Japanese market.

Since the export has been going slowly, farmers have suffered heavily. They have to bargain catfish materials away at below the farming costs to get money to pay bank debts.

The An Giang provincial fisheries association has reported that catfish price decreased further last week, now hovering around 21,500-23.000 dong per kilo, while the farming cost is 24,000-24,500 dong per kilo.

What will happen if the central bank rejects VASEP’s proposal? Hai said businesses would have to shrink back and scale down their production. They would not spend money to buy materials from farmers to store because of the expensive capital.

They may also force the material fish prices down in order to ensure profits for them. As a result, farmers would suffer more heavily because of losses, and they would think of giving up farming, which means the catfish industry would be thirsty for materials.

According to VASEP, 15-30 percent of the ponds have been left idle because farmers have given up farming.

Le Chi Binh, Deputy Chair of the An Giang Fisheries Association, said the provincial catfish farming has experienced a stormy year 2012 with the catfish farming area down dramatically from 1100 hectares to 800 hectares. In the past, there were 17 enterprises and 23 processing factories in the province, but nowadays, only ¼ still keeps operation.

Compiled by Thu Uyen