Vietnam agriculture exports face uphill struggle

08:55 | 11/05/2015 Trade

Vietnam agriculture, forestry and aquatic exports in the four months leading up to May dipped 5.1% on-year to US$8.5 billion, renewing pressure on the government to get the stalled sector moving.

Vietnam agriculture exports face uphill struggle

At a recent conference in Hanoi organized by the by the Ministry of Industry and Trade (MoIT) to address concerns over the slowdown, experts said though the overall decline was modest there were a number of key exports that dropped in the double digits that are cause for concern.

In particular, coffee was off 38.3% on-year and there was general consensus the decline was largely attributable to an overreliance on traditional markets and failure to focus sufficient attention on exploring and nurturing ‘emerging’ new markets including the domestic market.

Vietnam should follow the lead of countries like Brazil and Indonesia that routinely sell 35% of their coffee production domestically said Phan Huu De, general secretary of the Vietnam Coffee and Cocoa Association.

De said far too many domestic producers have patently ignored the local market and there needs to be an immediate push to bolster the domestic market share for not only coffee but all agricultural products. 

Seafood and other marine exports to the US, one of the largest foreign markets, were off 44% on the back of the imposition of antidumping tariffs said Nguyen Hoai Nam, vice general secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP).

Nam said seafood and other aquatic businesses, government offices and non-governmental organizations are now scurrying around seeking new sales outlets in markets like the Republic of Korea (RoK), China, Hong Kong and Gulf Cooperation Council (GCC) countries. 

Here again, domestic businesses in the industry have become too complacent, relying on key markets to carry the day and not proactively seeking supplementary markets to spread market risk around over a persified customer base.

In addition, lack of access to bank financing to fund investment in installing the latest in machinery and equipment and implement new technologies remains a critically important obstacle to growth noted Nguyen Viet Vinh, secretary of the Vietnam Coffee and Cocoa Association.

The most sure-fire way to boost the agricultural sector is to improve on the quality and productivity of agricultural, forest and marine products by investing in the application of science and technology— and the lack of access to credit puts the industry at a huge competitive disadvantage.

There was general agreement the sector also encountered difficulties related to the fluctuation of the VND/USD exchange rate during the early months of the year that negatively impacted the volume agricultural exports to a limited extent.

Tran Tuan Anh, deputy minister of the MoIT, said the ministry is in charge of market promotion but the agency cannot tackle the task alone, as it needs to be a joint effort in collaboration with the Ministry of Agriculture and Rural Development (MARD).

MARD generally limits its focus to agricultural output while the MoIT pays more attention to value, while exporters are primarily interested in profit only. These groups need to get coordinated and freely exchange information and devise cohesive policies for the development of the sector, said Nguyen Huu Dung, VASEP vice chair.

Le Van Anh, Chairman of the Vietnam Vegetable and Fruit Association (Vinafruit) stressed the need for the MoIT to increase the overall effectiveness of trade promotion programmes.

For his part, General Secretary of the Vietnam Coffee and Cocoa Association Nguyen Viet Vinh suggested the MoIT should organize substantially more trade promotions and hold them in conjunction with trade fairs.

Deputy Minister Anh of the MoIT underscored the importance of coordination and communication among the ministries, trade counsellors and businesses.

The fact is trade counsellors spend a great deal of time seeking information, however, the information hasn’t been disseminated to the right people in a timely manner thus enabling them to act and use it to their advantage.

                                                                                                                                                                     Source VOV News