EP 170 | AIRED 02/10/2014

Rumoured Export Policy Change, The Current State of the Pangasius Industry

February 10th, 2014 - Welcome to The Tradex Foods "3-Minute Market Insight" This is Robert Reierson and here is the seafood news for Monday February 10th, 2014.

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---We'll start this weeks episode by looking at a policy change for products exported to Europe.

Some of you may have heard rumours of an upcoming legislation change in Europe that will affect exports from North America.

As of December 13, 2014 there will be a "Common Organization of the Markets in Fishery and Aquaculture Products".

The CMO will be comprised of professional organizations responsible for: marketing standards, consumer information, competition rules and market intelligence.

One significant change will be the disclosure of glaze on packaging. A product that has 20 percent glaze will now have to have 4 kg labelled on the carton vs. 5 kg which is currently allowed.

Further changes expected are; Compliance: Imported products entering Union market comply with same requirements and marketing standard that Union producers comply with.

A Big Push for eco-labelling: The CMO will examine the possibility of developing and establishing minimum criteria for the development of a Union-wide eco-label for fishery and aquaculture products.

--- Consumer Protection for the purpose of consumer protection, Competent national authorities responsible for monitoring and Enforcing the fulfilment of the obligations laid down in this regulation should make full use of available technology, including DNA-testing in order to deter operators from falsely labelling catches.

A further push will be made for labels to include current voluntary information such the Flag state or country of the harvesting vessel, Type of fishing gear used in harvest and Landing and discharge port information for harvested products.

Although this is far from home it is a positive step towards eliminating fraud and unethical business practices currently plaguing the seafood industry.

---Rolling into Vietnam now. Vietnamese Pangasius is making news again.

Raw material prices for Pangasius in Vietnam rose 500 VND per kg this week bringing raw material prices to 23,000 VND about $1.09 USD per kg.

Slightly lower temperatures in Vietnam, Slowed growth rates and Processors operating under full capacity are all factors causing the rise in raw material prices. Shortage of finance continues to be the biggest problem for most small Pangasius processors.

Vietnamese banks are expected to call loans to Pangasius processors soon and according to unverified reports from the Vietnam business community as many as 50 more processors will stop operations as a result. According to industry sources many processors simply are not showing an adequate return on investment to continue operations.

The US Department of Commerce is expected to review anti dumping tariffs in March which may have further impact on the supply of Pangasius.

Importers are concerned over the current state of Vietnam's Pangasius industry as it has been struggling for the past few years. Despite processors warning of shortages current USA inventory is still relatively high with many containers in storage and more on the water. 7+ oz.

fillets are are short due to small raw material, but supply of 3-5 and 5-7 oz. fillets remains strong. Current prices range from $1.70-$1.80 USD for well trimmed white meat 100 percent net weight products containing STTP. There are discount products also being marketed, which are products that are less than full net weight, not white meat color, not fully trimmed at sub $1.50 prices. It is argued by marketers of Pangasius that these inferior products are leading to the erosion of the market for Pangasius or at the very least preventing growth in the market. If Vietnamese processors are correct we should see a spike in demand for low cost whitefish through Lent, which will result in shortages and price increases. Only time will tell if this is the case.


----Thanks for joining me for the Tradex Foods "3-Minute Market Insight" This is Rob Reierson - “BUY SMART” and “EAT MORE SEAFOOD”

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