Vietnam's Aquaculture Success Boosts Economy12 April 2012
ANALYSIS - The robust growth of Vietnam's aquaculture industry is expected to continue, providing jobs for nearly 5 per cent of their population, writes Sarah Mikesell, TheFishSite senior editor.
"Aquaculture is the future. We don't even begin to understand yet how important aquaculture is going to be," said Roy Bardole, US Soybean Export Council chairman, at a conference held in the US in early March.
"We all know that the wild catch is not growing as the world demand for fish grows," he said. "It's going down fast. Therefore, the only way we're going to have fish to eat in the future is with aquaculture."
Aquaculture's Potential in Vietnam
Vietnam's centrally planned government chose aquaculture as one of the key development programs in their 10-year plan. Today, they are third in the world in aquaculture production, behind China and India. Since 1999, Vietnam has seen tremendous growth in their aquaculture sector.
"In 1999, they had about 2,000 square miles of aquaculture," Bardole noted. "In 2010, they had well over 4,000 square miles of aquaculture. When you think about it, that's a big jump - it's a pretty good-sized lake."
Vietnam's aquaculture production went from about 160,000 tons in 1990, to nearly 500,000 tons in 2000. Then with the implementation of governmental supports, production increased by a factor of five in eight years to just under 2.5 million tons.
What Aquaculture Means to Vietnam's Economy
The aquaculture industry has been an incredible benefit to the economy of Vietnam. The Vietnamese government has announced a five-year interim plan that introduces the adoption of food safety, Bardone said.
2010 - 2015 Interim 5 Year Plan
- Aquaculture production to reach 3.6 million metric tons
- Increase of production area to 1.10 million hectares
- Export value to reach $3.5 to $4.0 billion
- Create jobs for about 3 million people
- 70 per cent of facilities / farming areas to comply with the conditions adopted to ensure food safety (100 per cent by 2020)
Bardole is confident that the Vietnamese government will not only reach their growth goals, but will surpass them. He believes feedstock will be key - Vietnam will import soymeal and export their fish products to the world.
And in the next three years, China - because of its growth in population and demand - will want all the aquaculture production that is currently traded on the world market, he said.
To be profitable, you've got to feed aquaculture species the right ration.
"You don't feed a trout the same thing you feed a sea bass or a tilapia or shrimp," he said. "They all have different feed needs. And it's such a new industry that we are learning as we go and figuring out what is the right ration for a catfish, a tilapia or any one of the fish species."
Vietnam has many modern feedmills, particularly in the Mekong Delta, and they produce over 2.3MMT of aquaculture feed alone. However, there is still a lack of good formulators particularly for fish other than Pangasius (catfish).
Feedmills have expressed a desire to learn how to incorporate more soy into their formulations and see it as a potential cost savings which is really important for their low margin species like Pangasius.
Soy Meal Market Changing
Vietnam is the third largest soy meal market in the world. And soybean production in Vietnam is not significant. By comparison, two counties in Iowa, USA, grow more soybeans than are grown in the entire country of Vietnam.
Of their imported soybeans, however, the US has a 75 per cent market share. The US soybeans are primarily brought in containers, with 60 percent in food and 40 per cent in full fat soy, which is very important in Vietnam.
Up until 2011, Vietnam had no local crushing industry, so all soybean meal had to be imported. But in 2011, Vietnam opened two crushing facilities which have changed the face of the market -- going from a soybean meal market to a soybean market - as they add value in their own country.
"India has 70 per cent of Vietnam's soy meal market, but that market is going to go away," Bardole said. "It's going to go away because India, at some point not very far in the future, is going to use every single bean they produce. This will change the face of the soy protein market worldwide."
India's meal to Vietnam is already decreasing. He said India's product is inexpensive, but they have some challenges with quality at times.
In almost 10 years, Vietnam's meal production has seen incredible growth, increasing by a factor of eight. Their growing population is demanding a growing protein supply and their growing income is demanding a growing animal protein supply.
When it comes to processing, Bardole said you can do the best job in the world growing a product, but if you can't process it and process it safely, you might as well have left the fish in the pond.
Vietnam has a well-established seafood processing industry, allowing them to quickly process and add value to aquaculture production. Bardole said that increasingly seafood buyers are seeing Vietnam has a better value for processing than China.
Vietnam is building a good deep water port for containers. Most of their ports, at this time are small ports - specifically catering to the nearby markets, where they purchase things from China and India, he said.
"There is one port that they have built that is definitely deep water, where Panamax kind of vessels can handle it really efficiently," he said. "In the US, we have built an infrastructure over a very long time. When you go to developing countries and they've built infrastructure, it's state of the art infrastructure, and it's where they want it and need it. That is truly an advantage for developing countries."
Vietnam - Young, Educated and Hungry for Growth
Vietnam has a very young population; the median age is 27 and 25 per cent of the population is under 15 years old. They are very literate, with over 94 per cent literacy.
In 2010, Vietnam saw solid economic growth of 6.8 per cent, with a per capita GDP of $3,100. Their GDP composition is 21 per cent agriculture, 41 per cent industry and 28 per cent services.