Domestic seafood enterprises have proposed many financial solutions to help them overcome difficulties in production and business during the novel coronavirus (COVID-19) pandemic, according to the Vietnam Association of Fisheries (VASEP).
They have a large inventory of seafood products while customers have delayed payment for many of their export batches. Meanwhile, the export value has also decreased significantly. Those have had a great impact on payment for their loans in March, April and May, VASEP said.
At present, many seafood enterprises need loans from banks while the banking loans have high interest rates. The annual interest rate of medium and long-term loans is 7 per cent at large commercial banks and 10.5 per cent at small commercial banks. In addition, the interest rate is from 6-8.5 per cent for dong loans and from 4-4.5 per cent for US dollar loans.
Therefore, they have proposed the banks have suitable interest rates ranging from 3 per cent to 6.5 per cent for dong loans and from 1.5 per cent to 2.8 per cent for US dollar loans, VASEP said that after a meeting with the seafood enterprises they have collected the financial solutions to deal with the existing difficulties.
They have suggested that banks should have loans with preferential interest rates at under 5 per cent per year for manufacturing businesses while reducing interest rates of loans disbursed from February 1, 2020.
The seafood businesses have also asked the banks to reduce procedures and conditions for lending and disbursement of loans. Banks should give them loans to store goods for consumption after the pandemic ends, said VASEP, adding that the banks need to increase the term of working capital loan from 4 to 6 months.
Besides that, the businesses have recommended the banks extend payment deadlines by 2-3 months for debts.
The enterprises expect free transfers at banks and reductions of 50 per cent for transfer fees to other banks. They also hope to enjoy free transfers from foreign banks to their accounts at local banks.
The businesses have suggested exempting or reducing fees for financial services and business activities, including free services during transactions at banks and fee reductions for services relating to import and export activities.
Up to now, the COVID-19 pandemic has lasted for more than three months and is still greatly affecting socio-economic development. Of which, the fishery sector has suffered a great impact from the disease, including shortage of labour and input materials.
For Asian markets, the seafood export activities to China, Japan and South Korea were slow due to the prolonged shipping time. Especially, in South Korea, some new customers have refused to import Vietnamese seafood products at the moment while some traditional customers have reduced the seafood import volume from Vietnam due to the disease. In the future, Vietnam’s seafood exports would continue suffering negative effects from the COVID-19 pandemic spreading around the world. So far, many countries like the US and the EU have had strict lockdown measures to prevent the spread of the COVID-19.
This has led to a sharp drop in out-of-home consumption of seafood in those markets, especially high-price seafood products, according to the association. However, Vietnam’s seafood exports to China are expected to resume because the pandemic has been brought under control.
According to the general Department of Customs, in the first two months of this year, Vietnam’s seafood export value reached $988.8 million, down 10.7 per cent year-on-year due to the COVID-19 epidemic.
During the first two months, the seafood export value dropped by 48.8 per cent to $61.4 million to China, 11 per cent to $109.2 million to the EU, 10.4 per cent to $39.6 million to Thailand, 9.3 per cent to $34.4 million to the UK, and 8.7 per cent to $97.4 million to South Korea.
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