16:36 | 26/07/2016 Trade
(VEN) - Despite the general downturn in Vietnamese exports, fruits and vegetables maintained a high growth at more than 50 percent in the first half of this year. The sector will even grow faster after the Trans Pacific Partnership (TPP) takes effect and tariff barriers in a number of hard-to-please markets will be removed.
Fruits and vegetables will benefit from TPP
Australia recently announced it would quickly complete procedures allowing the import of Vietnamese dragon fruit. Dragon fruit were second to litchi in obtaining license to enter Australia. Mangos are expected to be the third fruit to enter Australia which has high requirements for food imports.
According to the Vietnam Vegetable and Fruit Association, since 2004 the state has paid great attention to fruit and vegetable exports to demanding markets including many countries in the Trans Pacific Partnership (TPP) bloc.
Vietnamese fruit and vegetable exports to TPP countries have developed strongly in recent years. Many kinds of Vietnamese fruit have received licenses to enter these markets such as dragon fruit exports to New Zealand and Australia, litchi, longan and mango exports to the US, and mango and banana exports to Japan. Despite that, export revenues have remained modest averaging US$200 million per year, accounting for about 10 percent of Vietnamese total vegetable and fruit export earnings.
Reductions in tariffs on Vietnamese vegetable and fruit exports to TPP countries are expected to bring about great benefits to businesses considering that the existing tariffs on Vietnamese raw and processed fruits and vegetables are fairly high. Vietnam’s most potential markets in the TPP include Japan, the US and Mexico.
Take Japan, the import tax on potatoes currently stands at 40 percent within quotas and JPY2,796 per kilo without quotas. According to TPP commitments, taxes on non-quota potatoes will be maintained, while those on quota-based potatoes will be cut to 15 percent after six years.
According to statistics, Japan imported 200 tonnes of potatoes from Vietnam a year in the past three years.
As for tea, the non-quota tax will be reduced from 17 percent at present to zero percent in six years. Vietnam currently exports an average of 300 tonnes of tea to this market each year.
Making the most of opportunities
As Vietnamese fruit and vegetable export businesses have become familiar to markets in TPP countries, they are confident of future ample prospects.
However, many experts said that the Vietnamese farming sector needs to put in place comprehensive measures to grow in a sustainable manner.
Specifically, the Vietnam Coffee and Cocoa Association said that it has proposed that authorities should intensify agricultural zoning and provide seeds, technical support and preferential credit.
According to the Ministry of Agriculture and Rural Development’s Plant Protection Department, businesses should attach greater importance to the proper use of pesticides and applying good farming practice to ensure food safety.
The department underlined that businesses should cooperate with farmers and with each other, rather than compete with each other in terms of price.
In addition, agricultural experts said that developing deep production and processing would contribute to increasing the value of goods and avoid over-supply and reliance on markets.