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Special Feature: Pangasius
Regulatory hurdles and name changes have so far not stopped this import’s rising popularity
April 05, 2011
What’s in a name? When it comes to pangasius, it seems, a lot. Its on-again, off-again and maybe now on-again, classification as catfish is at the center of an attempt by domestic catfish farmers to strictly regulate a strong imported competitor. Meanwhile, the multiple accepted names for the imported species sold in the U.S. market (Pangasius hypophthalmus), which include striped pangasius, sutchi, tra and swai, have hampered its ability to stand alone as a product recognized by the average U.S. consumer.
But while Americans may not know what pangasius is, they’re eating more and more of it. The National Fisheries Institute of McLean, Va., reported that the species had broken onto the top 10 per-capita consumption list in 2009, and importers don’t see pangasius’ growth slowing down any time soon as it has steadily been making a name for itself as a cheap whitefish.
“With pangasius hitting the top 10 list, I think what we’re seeing and starting to experience is that the species has reached a tipping point — even with the continued pressure from U.S. catfish farmers,” says Chris December, president of QVD Aquaculture in Bellevue, Wash. The company, which imports pangasius, has so far this year seen a 40 percent increase in sales over last year.
“[Pangasius is] starting to get legs in the marketplace that will allow significant growth to occur,” explains December. “It’s extremely versatile. It picks up any flavor that you add to it, it’s easy to prepare and really positioned for any market. It’s just a fabulous replacement for a number of whitefish in the marketplace that may be two or three times the cost.”
In early March those differences remained significant. At wholesale, while both saw price increases, frozen pangasius fillets sold for around $2 per pound, and domestic frozen catfish fillets had climbed to the mid-$3 range.
Pangasius’ name issues began after Vietnam started exporting the South Asian species of catfish, farmed in the Mekong Delta, to the United States when trade opened up between the two countries in 1994. Domestic catfish farmers grew concerned that its one-third cheaper price tag was eating away at their market share, and successfully supported the 2002 U.S. Farm Bill, which mandated that pangasius could no longer use the catfish name.
Now, 10 years later, in tactics that appear to be a “do over,” the U.S. catfish lobby is advocating for pangasius to once again be labeled as catfish. That would make it fall under a measure in the 2008 Farm Bill that shifts overseas catfish inspections from the Food and Drug Administration to the more stringent U.S. Department of Agriculture. After more than two years on hold, a draft of the rules for catfish inspections was, according to a February editorial in the Wall Street Journal, “so onerous it would amount to a ban for at least several years while foreign fishermen struggle to comply.”
Pangasius’ status as a catfish remains uncertain but may be irrelevant as U.S. Sens. John McCain (R-Ariz.) and John Coburn (R-Okla.) introduced legislation on March 7 to repeal the shift of inspections from the USDA to FDA, stating that its real purpose is “inhibiting” the importation of pangasius and other types of catfish from Vietnam and other countries. Opponents of the measure also point out that the USDA has no experience regulating seafood; that the two agencies would overlap as the bill does not remove the FDA from catfish inspections; and that it could spark a trade war with Vietnam that reaches far beyond the scope of seafood.
The provision “is nothing more than the latest effort by members of Congress serving the special interests of the catfish industry in their home states,” says McCain. “A similar protectionist tactic was tried in the 2002 Farm Bill, when many of these same members slipped in language that made it illegal to label [pangasius] as catfish in U.S. retail markets. The intent there was to discourage American consumers from buying Vietnamese catfish products, even though they are virtually indistinguishable from U.S. grown catfish.”
If the legislation to repeal the measure is unsuccessful the earliest the USDA would publish its final rule for catfish inspection is June (draft rules for catfish inspections published in February are under a 120-day public comment period). U.S. catfish farmers say that shift in oversight is a key step toward increased safety of imported product.
“We’re not asking for any more rigorous inspections for imported product than our own,” says Joey Lowery, president of the Catfish Farmers of America. “They say their fish is an equivalent to our catfish — get the equipment if it is.”
Lowery says the more stringent USDA inspection rules would do a better job than the FDA’s low inspection rate of preventing unsafe product from entering the United States, potentially stopping a food-safety disaster that could hurt the rest of the industry.
“If a food-safety problem comes up it’s going to reflect on the whole industry, domestic and imported,” says Lowery. “It’d devastate everybody. That’s my main fear, if it was left unchecked.”
Pangasius importers also face a potential challenge from the U.S. Department of Commerce, which regulates tariffs stemming from an anti-dumping case designed to prevent importers from selling at below-market prices. At its March 15 meeting the DOC considered changing the surrogate country — the country used for comparison when the DOC puts together its formula for production costs — from Bangladesh to the Philippines. The technical change would have meant higher duties, with some possibly increasing two- or threefold, according to Matt Fass, president of Maritime Products International in Newport News, Va.
“That’s a pretty serious issue regardless of what happens with the USDA,” says Fass, who adds that coming up with a comparison country is made difficult by the fact that pangasius production in the Philippines and elsewhere is on such a small scale that it’s meaningless to compare it to Vietnam’s production costs. He also points out that these potential trade restrictions are coming when pangasius may be needed most.
“On top of this domestic catfish has been short for months,” says Fass. “A lot of fish [supplies] have gotten tight. A lot more folks are looking at pangasius and saying ‘this is a great fish.’”
If duty fees had been increased, December of QVD Aquaculture, whose product doesn’t fall under the anti-dumping review, predicts that other companies will be ready to fill in the gap, but he warns that U.S. consumers may feel an impact in rising prices. He would like to see the U.S. change its approach and celebrate the different origins of seafood similar to how coffee is marketed by where the beans are grown.
In the meantime, supporters of the U.S. catfish industry have also launched the website safecatfish.com to warn consumers of what it sees as the dangers of imported fish. Its efforts were rewarded last November when NBC’s “Today Show” aired an inflammatory segment about the risk of toxins in imported fish.
“I think the domestic catfish guys are doing an enormous disservice to the whole seafood industry by creating very bad media about the fish,” says Fass. “But in the face of that kind of media, in the face of duty issues, in the face of the USDA, it’s a great fish, consumers love it and it’s a healthy fish. It’s just unfortunate, what’s going on.”
Yet with all of the controversies surrounding pangasius and its rising popularity, one of the surprising factors is how little it is known to the average American consumer.
“We see the market for pangasius in the United States as growing, but still very underdeveloped in mainstream foodservice and retail,” says Rick Spalding, director of foodservice marketing for Fishery Products International in Danvers, Mass. “The typical American consumer has no idea what pangasius, sutchi, tra or swai is and whether they’ve ever eaten it. Most of what’s brought into this country is converted and likely sold as ‘whitefish’ in some other retail or foodservice application.”
Don Riffle, executive VP-sales and marketing for Clear Springs Foods in Buhl, Idaho, says it has taken some time for the company’s value-added pangasius products, which include citrus sesame, country cornmeal and panko-coated swai fillets, to gain traction in the market. The swai products have done well in the healthcare sector, and Clear Springs has downsized the portions to conform to healthcare-serving sizes. In retail, however, the products have not been picked up by large chain stores, only independent operators.
“It’s probably the most widely consumed fish that no one’s ever heard of,” agrees Don Kelley, procurement manager at Western Edge Seafood in Claysville, Pa. When Kelley asked chefs at the National Restaurant Show in Chicago last May how they menu pangasius, most often they emphasize the presentation of the dish, for example calling it a Portugese-style whitefish, rather than the species of fish.
“Really, the driving force behind the popularity of swai is the supply chain,” says Kelley. “Up and down the supply chain, they recognize it as a good value so they have driven the growth. The average consumer recognizes it as a whitefish.”
According to Jeffrey Goldberg, VP-purchasing for The Mazzetta Company in Highland Park, Ill., which sells pangasius fillets to retail and foodservice customers, the fish’s potential for growth hinges on having a quality product that is not over-treated with sodium tripolyphosphate. Its success also depends on whether the product bears a common name that consumers can recognize and start purchasing in major retailers.
“If it hits the mainstream then it will definitely move up to higher than No. 10,” says Goldberg, referring to per-capita consumption. “It’s a fantastic fish.” Assistant Editor Melissa Wood can be e-mailed at email@example.com
Find other SeaFood Business articles with pangasius here.