The price increase right now! all the factories offer the new price and it increased so fast. Vietnam is the world’s biggest supplier of pangasius. These days, the factories suffered a lot due to the new wave of the pandemic situation.
A week ago, since over 1000 cases per day were detected in HCM city, the pandemic situation in Vietnam was very serious. HCM City was applying Government Directive 16 from 9th July for 15 days. now nearly 19 cities are applying the Government Directive 16. This policy affected the supply chain of the panga market terribly.
- The raw material collection and transportation
Due to the restriction of the Government Directive 16, the social distance is highlighted. The new raw material is hard to collect because less labor can go to the farm, and the transportation fee is much higher than before, even tripled. Few truckers will load the raw material to the factory because there will be many checks during the long distance. Moreover, these drivers are also concerned about being affected.
The labor situation in the factory
Since the daily confirmed cases are still high, the factory got a solution for the labor force. They ask the workers to stay in the factory for the whole day, and the factory will figure the food and the dormitory. Only 40% of the workers choose to stay and live in the factory, and the factory will pay 3-4 times salary than usual.
Factory production situation
For the factory’s production, most of the factory has the stock semi-treated products. As Ocean Treasure knows, these semi-treated products can last for about one month. Many factories stopped gutting the new materials for the processing situation since there might be some infection from the fish from the farm. All the labor now is doing packaging and will not touch the raw material. The factory strictly separates the material and the workers. In this condition, the production efficiency is terrible affected. Many factories are hesitating to accept the new orders because they cannot afford that much production yet.
Raw material situation
The raw material is the farm will stay in the water until the pandemic situation is stable for most factories. Usually, the factory prefers the small fish to process it into fillet for panga fish – the most sale presentation for panga. If the panga grows too big, then the farmers may feel hard to sell to the factories. Because in the factory side, the too big panga raw material is hard to process into suitable small-size fillets. So after the pandemic, there might be a period that the raw material price will decrease for the big size. Also, for the small size panga, the raw material price might increase.
Shipping lines have announced increasing freight rates and fees by 2-10 times (depending on the route, depending on the carrier), especially in many essential routes such as the US, Europe, Canada…which causes sudden difficulties, congestion, and very high costs for Vietnam’s seafood export industry in particular and export industries in general.
The aggregate price index of eight major shipping routes globally has also increased by nearly 300% over the same period last year. Despite such high rental prices, it is still difficult for the shipper to get the booking due to the shortage of containers at ports and routes. Typically, even though the containers booked a month in advance, many exporters could not rent them.
So for pangasius, if importers need small-sized fish fillets, we should start our procurement plan as soon as possible. If our demand is main for big-size, we also start purchasing as soon as possible. Because the price of this freight has an undeniable impact on the overall price of pangasius – the unit price of pangasius is low. If the pandemic did not control well, shipping costs in Vietnam would also rise sharply. This situation seems very similar to China.