Hanoi (VNS/VNA) –Vietnam’s tra fish export sector was probably the mostimproved industry this year, but rampant production could lead to excesssupplies and price drops, according to Viet Dragon Securities Company (VDSC).

Many farmers have rushed to breed tra fishafter prices increased steadily from the beginning of 2017 due to fingerlingand raw materials shortages.

The situation may lead to oversupply of rawmaterials when farms step into the harvest season. The selling price of rawfish for factories could be reduced, the company said.

Farms could suffer great losses and stopbreeding tra for the next season, meaning they would lack rawmaterials for the next crop, VDSC warned.

However, according to the firm, if the US-Chinatrade war continues, Vietnam could increase its market share in the US,replacing Chinese tilapia that currently accounts for 40 percent of all fishimports to the US.

Barriers to Vietnamese tra fishin the US market are likely to decrease. Vietnam has passed the US Departmentof Agriculture (USDA) field tests – the most important step in the assessmentprocess established by the USADA’s FoodSafety and Inspection Service (FSIS).

In addition, the preliminary anti-dumping tax onbasa fish during the 14th administrative review period (POR 14) issignificantly lower than that of POR 13. As a result, VDSC expects the tra fishexport volume to the US market to increase sharply this year.

The EU-Vietnam Free Trade Agreement (EVFTA) maybe approved early this year. If the EVFTA is approved, the import tariff forfrozen tra fish fillets will be reduced from the current rateof 5.5 percent to zero within three years. The rate for processed tra filletswill be reduced from 7 percent to zero within seven years. VDSC said demandfor tra fish in the EU is expected to rise.

With the popularity of processed products in theUS and EU markets, Vietnam has the potential to increase its profits fromhigh-value products. The gross margin for the products is 22-25 percent, higherthan the margin of 12-16 percent for frozen fillets.

The world population will exceed 8.5 billionpeople by 2030. As the natural fish supply worldwide is dwindling, the marketshare of farmed fish is expected to increase from 47 percent in 2016 to 54 percentin 2030. According to VDSC, this change presents a chance for tra producerslike Vinh Hoan to expand production.

Vietnam’s Mekong Delta region has favourableecological conditions for large-scale tra farming. The naturalconditions combined with advanced farming technology will producewhite-meat tra products, a favourite choice of consumers.Other major tra producers such as India, Bangladesh, Thailandand Indonesia produce low-value yellow-meat tra fish.

Vietnam’s export value of the fish was estimatedat 2.3 billion USD for 2018, higher than the 1.8 billion USD recorded in 2017,according to the Vietnam Association of Seafood Exporters and Producers(VASEP).-VNS/VNA