An anchovy processing plant in HCM City. Local seafood businesses are having to cut down on production due to insufficient raw materials. — VNA/VNS Photo

HCM CITY — HCM City’s seafood processing businesses are facing raw material shortages just before the usual peak demand season close to Tết.

Though many have plenty of domestic and overseas orders, they are forced to cut down on production as a result.

Phạm Quang Hiệp, owner of an anchovy processing factory in Phước Thắng Ward, said demand remains stable but raw materials are becoming increasingly scarce. His business managed to procure only around 100 tonnes of anchovy in 2025, down 30 per cent from 2024.

So it had to reject orders and extend delivery times, he said.

He said the supply squeeze is particularly worrying as his firm exports to foreign markets like China and Singapore, and production disruptions could damage its reputation.

According to Trần Đức Hồi, chairman of the Hải Đăng Anchovy Fishermen's Union, catches have declined sharply in recent years.

“The main reason is stricter fishing regulations.

“While these apply only to certain areas, they do not reflect the characteristics of traditional fishing methods, leading to a steep fall in catches.”

Supply of anchovy to fish sauce businesses and other processors has taken a hit.

Nguyễn Thành Lộc, chairman of Phúc Lộc Vũng Tàu Co., Ltd. and Long Sơn Seafood Processing Co., Ltd., said both companies previously exported fishmeal to China, Indonesia and the Philippines but are now limited to the domestic market.

Between 2019 and 2023, the two bought and processed around 5,000 tonnes of raw materials per month, and that figure has now fallen to around 700 tonnes, forcing them to cut production and lay off staff despite strong demand.

Missed opportunities

Many processed seafood products made by HCM City companies – including surimi, squid, crab, fishmeal and dried seafood – are well received at home and abroad, with orders typically surging in the lead-up to Tết.

But the shortage of raw materials is preventing businesses from accepting large orders and expanding into new markets.

In 2025, HCM City harvested and caught only 397,000 tonnes of seafood, or only around 60 per cent of local processing needs, and the rest had to be sourced from other provinces or imported.

Phạm Thị Na, deputy director of the city's Department of Agriculture and Environment, said the shortfall reflects years of overexploitation.

She said the city aims to reduce fishing activity while expanding aquaculture, particularly hi-tech farming, and increasing value-added output. Cutting back on fishing is intended to allow stocks to recover and support long-term sustainability.

In recent years, HCM City has reduced the number of fishing vessels and tightened controls to curb overfishing while improving efficiency.

Nguyễn Văn Lộc, deputy chairman of the city seafood association, said the industry needs coordinated strategies to develop both processing capacity and raw material supply, including closer cooperation between businesses and fishermen and fish farmers. — VNS