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Bulk buying of live crocs by Chinese traders hurts Vietnam leather firms

Bulk buying of live crocs by Chinese traders hurts Vietnam leather firms

Monday, October 06, 2014, 14:04 GMT+7

Many crocodile leather businesses in Vietnam are facing a raw material shortage, as crocodile farms are selling the live reptiles to Chinese traders en masse to yield bigger profits.

Ca Sau Hoa Ca (Saltwater Crocodile), a well-known Ho Chi Minh City firm that makes handicrafts and souvenirs from crocodile skin, used to source more than 200 crocodiles a month to tan their skins for production.

But the company has been using skins from its reserve stock this year as it is unable to pay higher prices than the rates Chinese traders are bidding to buy live reptiles from local farms, company director Ton That Hung told Tuoi Tre (Youth) newspaper.

In order to maintain a profit, the leather company can only pay up to VND170,000 (US$8) a kg for live crocodiles, according to Hung.

But Chinese traders are willing to buy the animals for up to VND240,000 ($11.3) a kg, he said.

“So the crocodile farms prefer selling to the Chinese,” he added.

Hung said his company is able to continue business, though at a smaller scale, thanks to a reserve stock of skins.

“Smaller businesses had to shut down since they could not solve the problem,” he said.

This is not the first time Chinese traders have affected the production of Vietnamese businesses by buying their crucial raw materials in large quantities. Similar cases have impacted seafood, mango and coconut processors, and fish sauce makers.

Vietnamese crocodile leather manufacturers faced the risk of a short supply as early as two years ago, when Chinese traders began hunting for young crocodiles at high prices.

“The Chinese bought as much as 70 to 80 percent of Vietnam’s supply of young crocodiles then,” an industry insider said.

“So we do not have enough mature crocodile skin to tan at the moment,” he added.

The best quality skins are those tanned from crocodiles weighing 15 to 20kg, according to the insider.

“But we have few such crocodiles now, as the animals weighing 6 to 8kg were all bought by Chinese traders in 2012,” he said.

Many crocodile leather firms have increased their product prices due to the skin shortage, according to Hung, of the Ca Sau Hoa Ca Co.

“Businesses that export their products to Japan or Germany are on the verge of losing orders,” he added.

Rising demand for crocodile dishes?

Nguyen Thi Lan, a trader in the Mekong Delta province of Dong Thap who collects crocodiles to sell to China, said prices for the animals have soared sharply over the last two years.

In 2012, crocodiles weighing between 8 and 35kg were sold for only VND150,000 ($7.06) per kg, but the prices are now up to VND240,000 a kg, Lan said.

“I had received an order for 40 metric tons of live crocodiles per month, but could only export 11 metric tons, even though I had hunted everywhere for the reptiles,” Lan said.

“Two years ago it only took me a week to source enough for the order.”

Lan said there has been rising demand for dishes made from crocodiles in China over the last few years.

The Chinese traders are also hunting for young crocodiles in Vietnam to bring to farms on Hainan Island, she added.

Prices for the young animals thus rose steeply to VND1 million ($47) a kg, but supply was behind demand, according to the Dong Thap trader.

“Most of the crocodiles are raised on small-scale farms in Vietnam, so the growers will sell to whoever pays a higher price,” Lan said.

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