VASEP: The distance until September 15 will cause the seafood production chain to break

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According to the survey results of the Vietnam Seafood Processing and Export Association, Tien Giang, Can Tho, Hau Giang, Dong Thap are the provinces with the largest number of seafood enterprises that completely cease operation or suspend production to reorganize the implementation of “3 on the spot”. Particularly in Ca Mau and Soc Trang provinces,… a small number of enterprises are still trying to maintain the number of workers, carry out shifting and threading to both ensure production and ensure epidemic prevention and control at the factory.

With operating businesses, the long-term isolation of localities makes workers and workers engaged in “3-on-the-spot” work begin to get tired and look forward to going home. This makes it difficult for businesses that want to continue to maintain production according to the old model.

Not only that, the costs arising from concentrated accommodation, testing and disease screening, while the capacity is only 50-60%, also eroded the business’s finances, threatening to maintain production if without government support.

Only 30-40% of seafood enterprises have the capacity to recover production immediately after the quarantine

In addition to trying to maintain the key labor force to continue production and operating the factory, seafood enterprises will continue to pay basic wages for temporarily laid-off workers. Businesses that stop operating, give employees time off but still pay wages to retain employees.

The survey results show that only 30-40% of enterprises have enough capacity to resume production immediately after the end of social distancing, the rest cannot or it takes a long time. The reason is that the recovery process is greatly affected by the broken supply chain of raw materials, difficulties in transportation; businesses lose customers due to the long gap between implementation and delivery schedule; Especially, it is difficult to regroup the workforce as before because they have not had enough vaccines, have left the working area, are in isolation or are being treated for Covid-19.

According to the assessment of this survey, if the gap continues until mid-September 2021, the possibility of chain breakage is very high and it is difficult to restore production to normal.

Raw material prices will increase up to 20% in the last months of the year

The source of raw materials greatly affects and determines the price of products, however, due to the influence of the epidemic and regulations on distance, seafood enterprises cannot mobilize the source of raw materials. Raw materials are stagnation, pushing prices down sharply, people do not continue to raise livestock… It is forecasted that the source of raw materials from farming will be 20-30% short and the price of raw materials will increase by 10-20% in the last months of the year.

For raw materials for marine exploitation, there are also many difficulties because fishermen cannot go to sea to catch fish, fishing ports are also limited or stopped working. It is expected that the source of domestically exploited raw materials will decrease by 30-40%, the price will increase by 20-30% respectively.

Import markets recovered, leading to a 10-20% increase in orders by July 2021, creating a good opportunity to boost export flows for Vietnamese seafood. But distance regulations make businesses late delivery, leading to loss of customers. According to statistics, by the end of August 2021, up to 40-50% of orders were delivered late and about 10-15% of orders were cancelled. Even if the distance is eased after September 15, the ability to get back orders for the year-end holiday season is very limited.

High shipping fees (from 2-10 times), no suitable adjustment, the ability to reserve containers and ships is difficult, making businesses more passive in terms of time and costs, directly affecting the ability to competition of Vietnamese seafood. Many importers have expressed concern that, in the short term, they will still keep orders but may consider finding alternative sources.

Only 30-40% of businesses have completed the first dose vaccination

By the end of August 2021, the vaccination rate (shot 1) for fishery workers in the South and Mekong Delta averaged 30-40%, no enterprises have been deployed to receive 2 shots. The priority of vaccination for workers of different localities is carried out differently, while the group of enterprises in Ca Mau province is vaccinated the most and fastest from 90-95% of workers, in other localities such as Long An, Can Tho, Hau Giang,… or central and south central coastal provinces such as Da Nang, Khanh Hoa… The injection rate is very small and not consistent with the level of local outbreaks.

VASEP has also asked the Prime Minister to consider the priority order of components to be vaccinated against Covid-19. Accordingly, after people working at health facilities and related officials who have to come into contact with people, the elderly, and people with underlying diseases, the next order is the workers (in production, storage, etc.). essential commodities; in factories,  industrial parks – performing production for export in general and seafood production and export in particular), in which vaccination is given special priority to the workforce. operations at factories that are applying the “3 on-site” method in localities in September 2021. Especially, workers in the seafood industry working in a closed and humid environment are easy to spread diseases.

In addition, VASEP also suggested that localities do not rigidly apply the “3 on-site” production regulations by guiding businesses to implement “1 route – 2 destinations” after having had enough Covid-19 vaccines. 19 and the worker’s residence is an off-site location.

Source: ndh.vn – Translated by fintel.vn