Enhancing Competiveness for Vietnam’s Agricultural Products

Speaking at the function, Mr Vo Hung Dung, Director of VCCI Can Tho, affirmed that aquatic export value is potentially higher than rice in the Mekong Delta and the value is set to rise in the coming time. However, the labour productivity in the region is still very low due to higher input prices amid declining export prices and insufficient information which leads to unplanned, unstable development. In the coming time, Vietnamese enterprises in general and exporters of agricultural and aquatic products in the Mekong Delta in particular need to have positive measures to increase competitiveness to boost exports.

 

According to data released at the meeting, aquatic export turnover edged up 0.7 percent in July after six months of declines in early 2013 but the export revenue of agricultural products seriously plunged. The Ministry of Agriculture and Rural Development said the country’s export turnover of agricultural, forest and aquatic products was estimated at US$2.39 billion in August, totalling US$17.98 billion in the first eight months of 2013, down 1.1 percent year on year. Particularly, the export value of agricultural staples was forecast at US$8.99 billion, down 11.7 percent; and seafood earnings were estimated at US$4 billion, up 1.3 percent year on year.

 

Rice, one of key exports of Vietnam, has faced a lot of difficulties. The volume of exported rice was estimated at 463,000 tonnes worth US$202 million in August, aggregating 4.69 million tonnes and US$2.05 billion in the first eight months of 2013, down 15.7 percent in volume and 18.4 percent in value over the same period in 2012. Rice export price averaged at US$438.49 per tonne in the first seven months of 2013, down 3.2 percent over the same period in 2012.

 

The United States, China and South Korea remained primary export markets of Vietnam’s agricultural and aquatic products. Seafood export to China, Canada and Thailand respectively increased 52.7 percent, 6.8 percent, and 9.6 percent year on year. But, declines were seen in shipments to Japan (down 1 percent), South Korea (19.1 percent) and Spain (11.5 percent). Vietnamese exporters of agricultural and aquatic products are facing a lot of difficulties, especially from shrinkages in traditional markets.

 

At the workshop, the Ministry of Industry and Trade attributed the decline to higher import barriers in traditional markets like the US, Europe, Japan and South Korea, heavy reliance on traditional markets, impacts of economic downturn, and weak brand names of Vietnamese products in the world. In addition, information as well as understanding of foreign partners poses domestic exporters to credit risks and trade disputes.

 

Regarding trade disputes and bad debt risks against exporters of agricultural and aquatic products, Mr Nguyen Phuong Lam, Head of Legal Department at VCCI Can Tho, said that one of weaknesses of Vietnamese companies is insufficient information about markets and customers. So, to deal and resolve trade disputes, they must understand principles of trade and international trade laws (contract terms need attention), understand markets, and invest more to capture information about customers and partners.

 

In particular, they also need to think of financial benefits from Export Credit Insurance because in case bad debts appear and they cannot collect these debts, insurance companies will pay such debts if they satisfy conditions of insurance policies. Holding these policies, exporters will surely feel more confident to sign contracts with deferred payment terms, encourage current buyers to purchase more, and attract new customers, thus helping them enhance competitiveness.

 

Besides, according to experts, companies should boost export by means of broadening brand identity to global partners. They also need pay attention to experiences from previous trade disputes and bad debts risks incurred by exporters of agricultural and aquatic products.