Aquaculture & Freshwater

Viet Nam pangasius farmers reap bumper profits in 2018

Strong price gains in 2018 translated into profit margins of up to 50 percent for Viet Nam’s farmed pangasius sector and saw the country’s pangasius export revenue exceed USD 2 billion for the first time. In 2019, prices are expected to drop slightly but the outlook remains positive due to good conditions in multiple markets.


Total harvests of farmed pangasius in Viet Nam are expected to exceed 1.3 million tonnes in 2018, up 6 percent compared with 2017. This figure represents around half of the total global production, but Viet Nam is much more focused on export than other large producers like Bangladesh, India and Indonesia. The Vietnamese sector has benefitted significantly from soaring prices for traded pangasius and a large proportion of these profits are now being invested into expanding and modernizing the industry.

Farming areas in the Mekong Delta have grown, as farmers seek to maximize their share of future profits. According to the Ministry of Agriculture and Rural Development, total farming area increased to around 5?400 hectares, 3.3 percent larger than in 2017. The largest reported newly developed site is a 600 hectare, 200?000 tonne pangasius site, expected to start operating in late 2019. The Viet Nam Pangasius Association (VPA) has also stressed the need to focus on broodstock quality, general fish health and technological improvement in order to ensure sustainable growth. Vietnamese farming companies are also investing upstream, in hatcheries, and downstream, in processing facilities, in a bid to improve vertical integration and avail of the resulting efficiency gains.

Vietnamese producers are mindful of increasing competition from other Asian countries, particularly China, and the associated decline of their share of total supply. China remains some distance behind Bangladesh and Indonesia in terms of its capacity, but this could change rapidly as its powerful aquaculture industry sets its sights on supplying the strong and fast-growing domestic demand for the species. It should be recognized that Viet Nam’s dominance is not only due to volume but also a consequence of its efficient and technologically advanced industry with a focus on quality, meaning it will likely be some years before Chinese pangasius producers can compete directly even in the Chinese domestic market.


The positive performance of Viet Nam’s pangasius export industry in 2018 was driven by good demand in a range of key markets across multiple world regions. The most significant growth was seen in China, where consumers’ traditional taste for freshwater fish has allowed pangasius marketers to carve out a profitable segment for themselves amidst a general increase in demand for seafood generally. Prices in China are still lower than those in the United States of America and the EU28 where product requirements are more stringent. Demand was stable in the United States of America in 2018 despite a sharp price increase and import challenges associated with the new US Department of Agriculture (USDA) inspection regime for Siluriformes, a taxonomic group that includes pangasius.

Demonstrated commitment to traceability and fish health in the EU28, combined with effective retail campaigns has seen some recovery of demand after years of decline that followed negative media coverage. Demand for pangasius has also been strong in markets in the Asia Pacific, particularly the Association of Southeast Asian Nations (ASEAN) bloc, supplied primarily by Viet Nam but also by other regional producers such as Indonesia, Malaysia and China. Consumers in Latin American countries such as Mexico and Brazil have also developed a taste for pangasius but these markets are sensitive to rising prices.


According to Viet Nam’s Ministry of Agriculture and Rural Development, total pangasius exports reached USD 2.26 billion in 2018, exceeding the industry’s stated USD 2 billion target on the back of broad-based demand and high price levels. This represents a 26 percent increase compared with 2017. China and Hong Kong SAR have been vying with the United States of America for the status of Viet Nam’s largest export market but the most recent reports suggest the United States of America has taken first place on full year statistics. Exports to the United States of America have been boosted by the success of concerted efforts to implement the measures necessary to pass USDA’s field tests, which are the most important step in ensuring access to the US market. The EU28 market was Viet Nam’s third largest export market in 2018, followed by combined exports to the ASEAN bloc. Both Viet Nam and Indonesia are seeking to increase exports to the Middle East, but strict Halal certification requirements are impeding access to the key Saudi Arabian market.


Fingerling issues restricted raw material supply from Viet Nam in early 2018 and drove up prices, helped by strong upward pressure from demand growth in the majority of export markets. The Viet Nam Association of Seafood Exporters and Producers (VASEP) reported average farmgate prices of USD 1.29–1.51 per kg for 2018, with healthy profit margins for farmers. These levels have made pangasius farming several times more profitable than rice farming, the other major agricultural industry of the Mekong Delta, and many new players have entered the sector as a result. FOB export prices hovered around USD 3.25 per kg in 2018, marking the peak of a pronounced upward trend that has seen export prices rise 60 percent from the USD 2 per kg low reported at the beginning of 2016.


The Vietnamese government has set a production target of 1.51 million tonnes of pangasius for 2019, a significantly higher figure than previous forecasts. The VPA has warned of the potential price drop given increased capacity, but a severe decline should be prevented by positive market conditions and a combination of developments that are expected to further strengthen international demand for Vietnamese pangasius. First, the reduction of anti-dumping tariffs and Viet Nam’s success in meeting USDA market access standards should see Vietnamese exports to the United States of America increase. Second, the recent agreement of a Free Trade Agreement (FTA) between the EU28 and Viet Nam, expected to enter into force around the second half of 2019, will see EU28 tariffs for major Vietnamese pangasius products eliminated over the course of three years. Third, an expected decline in total whitefish production and the trade war tariffs on whitefish imports into the United States of America and China will also strengthen pangasius’ global market position. As a result, Viet Nam’s total pangasius export revenue is expected to increase by around 5 percent in 2019, to some USD 2.4 billion.