Price volatility risk and management strategies in Vietnamese pangasius production

Vietnamese farmed pangasius products have experienced major price fluctuations over numerous crop cycles exposing this important export commodity to risk and uncertainty. This study focuses on two distinct areas of risk. First, this study seeks to measures the farm-gate price volatility, explores farmers’ perceptions about the price volatility risk related to the input sourcing and output selling activities, and quantifies the effectiveness of price volatility risk management strategies. Second, the relationships between farm and farmer socioeconomic characteristics, perceptions about the price volatility risk and management strategies are also examined. To respond to these research questions, a focus group workshop was conducted with 29 stakeholders and a structured survey with 92 farmers located in the provinces of An Giang, Can Tho, and Dong Thap of the Vietnamese Mekong Delta. Results illustrated that the pangasius farm-gate price fluctuates significantly over time. Vietnamese pangasius farmers are mainly concerned about the volatilities of input and output prices, additionally with the instability of the volume input supply, instability in demand volume, and weak legislation on sale contracts. Results further indicate that price volatility risk management strategies are less effective in practically protecting farmers against price volatility risks. Farmers with higher education knowledge opt for fully integrated farms and are less concerned about the output price volatility risk. Promoting risk-sharing schemes such as contract farms or insurance for farmers with higher educational levels and being accessible to credit could support Vietnamese pangasius farmers toward increasing the sustainability of pangasius production.