Export of Vietnamese agricultural and forestry products 2021: Challenges & opportunities

In 2020, the Covid-19 epidemic will significantly affect the consumption and export of agricultural and forest products. However, there are still many export opportunities for businesses. Representatives of commodity associations and enterprises shared about challenges and opportunities for exporting Vietnamese agricultural and forest products.

Mr. Pham Van Cong – Chairman of Vietnam Cashew Association (Vinacas): The paradox of the Vietnamese cashew industry

Vietnam is the world leader in cashew processing and exporting, but most of the cashew processing and exporting enterprises are small and super small. Meanwhile, many other countries such as India and African countries with large supply of raw cashew nuts are “resurging”, promoting processing to assert its position.

Vietnam Cashew has a reputable and wide market, but it is still only raw material for deeply processed products with high added value. In the global value chain, Vietnam mainly exports preliminarily processed kernels for 10 USD / kg, while processed cashew kernels sold in supermarkets around the world cost about 30 USD / kg. Thus, Vietnam only accounts for 30% of the cashew industry value chain, the remaining value belongs to international cashew roasters and distributors.

Another problem of the cashew industry in Vietnam is that it is not active in the source of raw materials, most of the raw cashew must be imported for processing, especially from Africa. Meanwhile, all transactions of exporting and importing cashew must be through intermediaries, so they are always passive in prices.

Paradoxically, the quality of domestic cashew nuts is much better than imported raw cashew, cashews grown in Vietnam are also rated as the best in the world by importers and are looking to buy at a higher price. However, in recent years, the area of ​​cashew in the country tended to decrease, because cashew land has been urbanized and cannot compete with other crops.

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Mr. Nguyen Van Thanh – Director of Phuoc Thanh IV Production – Trading Company Limited: Rice exports are flourishing

In 2020, rice exporting enterprises face many difficulties, especially affected by the impact of the Covid-19 epidemic. However, Vietnam’s rice exports are flourishing. In addition to traditional markets such as the Philippines, China, Malaysia … there have been many new markets such as Taiwan (China), Australia, Korea, EU … In the last 2 months, export rice prices are high. For green rice, the price of fragrant rice is about 570 USD / ton, higher than the price of 520-540 USD / ton before.

But now the company does not have a large amount of rice to sell, although many customers contact us. The reason is that the recent saline intrusion has affected the Autumn-Winter rice crop in the Mekong Delta provinces. The rice is of poor quality and difficult to process for export. On the other hand, the rice price increase will be good for farmers, but if buying at high prices and exporting at low signed prices before, businesses will face difficulties.

It is forecasted that the rice export market in the coming time will have many prospects. From now to 2025, rice export price may increase 15-20%, due to high demand but limited world rice supply. The demand for rice reserves of major importing countries will increase as the Covid-19 epidemic continues to be complicated. Meanwhile, the rice output of some exporting countries such as Thailand, Cambodia, and India has decreased due to the impact of climate change, floods … On the other hand, farmers have changed from rice land to cultivation. The increasing number of fruit trees due to the low income from rice cultivation is also the reason for the limited supply.

In addition, the fact that Vietnam’s ST25 rice was honored as the best rice in the world in 2019 has made many new customers come to Vietnamese rice. This is a positive signal when Vietnam has had high quality rice varieties recognized by the world in recent years.

However, in order to improve the competitiveness of Vietnamese rice, in the coming time, the Ministry of Agriculture and Rural Development, ministries, branches and localities need to well protect the ST25 rice variety; strengthening management, combating counterfeiting and must strictly deal with any violations to protect TS25 rice brand. In addition, ministries, branches and localities need to implement specific and appropriate planning for delicious rice varieties to ensure high quality and productivity.

On the other hand, the Mekong River Delta needs to change production thinking, should not chase output, but turn to improve quality and value. Some localities should change from producing 3 rice crops / year to 2 rice crops / year.

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Mr. Phan The Hai – Director of Trieu Phu Loc Company Limited: Great opportunity to export wooden furniture

The Covid-19 epidemic occurred, causing countries to stop trading, causing importers to fall into a shortage of goods. Therefore, when there was a clearance notice, foreign wood importers quickly placed orders with Vietnamese wood processing enterprises.

Previously, importers ordered monthly or quarterly, Vietnamese enterprises delivered goods regularly. Currently, in order to cope with the epidemic, there are still goods to meet market demand, importers have tripled their orders, and Vietnam’s wood industry has had great export opportunities.

However, when a foreign wood furniture importer increases orders in a short period of time, it is both an opportunity and a difficulty for enterprises that have stable orders. Because, the increase in the number of goods means an increase in productivity in the same unit of time. For the wood processing and export industry, it is very difficult for enterprises to recruit highly skilled workers to “speed up” production.

The Vietnam – EU Free Trade Agreement (EVFTA), which took effect from August 2020, has boosted wood furniture exports. It is estimated that, from August 2020 to November 2020, the amount of wood products exported by enterprises to the European market has doubled compared to before. This is a positive signal for the Vietnamese wood industry.

Source: Petro Times

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