The lack of formal relationships between farms and processors is a hindrance for the shrimp sector in Vietnam. Shrimp are often bought by factories in the form of spot market transactions at the reception area of each processing plant where middlemen bring their products to the factory. The products are sold for a fixed daily price or by auctioning.
There are around 100 shrimp processing companies in Vietnam, half of which are located in the Mekong River Delta. Many of the companies involved have more than one factory. In some cases these factories operate as a group with one sourcing and marketing department, but in other cases individual factories have separate marketing and sourcing departments. Some factories have multiple EU approval numbers. This is mostly the case when there are multiple workshops on the same premises. Each workshop needs to get its own EU approval number.
Most processors are also exporters, while others use agents that eventually sell to international buyers. This is another obstacle in the shrimp sector which further complicates traceability, particularly when international buyers prefer to buy from trading companies with cheap prices, rather than relying on companies that can provide traceability back to the farm at a higher price.
Increasingly, Vietnamese processors also rely on imports to optimize their production capacities. Large quantities of head-on shell-on (HOSO) products are imported from countries such as India and Ecuador, processed into value-added products, and then re-exported. Apart from the available capacities, this is also due to relatively good food safety standards and a skilled and cheap workforce.