This is an overarching task of the Vietnamese agricultural sector in recent days in an attempt to lessen dependence on the Chinese market.
Speaking at the conference seeking and discussing measures to boost exports of farming and aquatic products amid the spiralling tensions with China on the East Sea in Hanoi on June 3, 2014 by the Ministry of Agriculture and Rural Development in collaboration with the Ministry of Industry and Trade, Minister of Agriculture and Rural Development Cao Duc Phat said Vietnam earned US$12.1 billion from exporting agricultural, forest and aquatic products in the first five months of 2014, up 10.5 percent year on year. But in May alone, the earnings declined 18 percent from a year earlier.
Paradoxically, the market was shrinking while Vietnam enjoyed a good rice harvest, livestock husbandry, aquaculture and commercial fishing. Although East Sea tensions with China escalated, the commercial fishing output still continued to increase in the first five months. Thus, if Vietnam lacks timely measures to deal with this paradox, prices of agricultural products will likely fall in the near future.
Minister of Industry and Trade Vu Huy Hoang attributed the decline in agricultural export value to weak demand in importing markets in the wake of intense competitive pressures, commercial and technical barriers to trade on imported agricultural and aquatic products.
He added that limitations in agricultural, forestry and aquatic production and exportation remain unresolved for years. Existing weaknesses include inconsistently planned production zones, simple processing, weak financial capacity and competitiveness of exporters.
Currently, China is the largest importer of Vietnamese agricultural products. This market is quite easygoing with quality while procedures are simple and quick. Hence, Vietnamese traders are very keen on this market. Currently, shipments to China accounts for a fifth of Vietnam’s total export turnover of agricultural, aquatic and forest products, with key items being rice, rubber and fruits. In 2013, Vietnam exported over 2 million tonnes of rice under quotas granted to traders, accounting for a third of Vietnam’s exported rice, regardless of 1.6 million tonnes of rice exported in small volume shipments. Up to 45 percent of Vietnam’s 1 million tonnes of rubber was transported to China. This nation was also the largest consumer of Vietnam’s fruits with over 32 percent of market share.
Although trade between Vietnam and China has not been significantly affected by spats on the East Sea, the excessive dependence on one market will cause uncertainty, volatility and risk exposures when unexpected situations occur, said Minister Hoang. If tensions continue and tend to worsen in the coming time, agricultural exports will be seriously affected and millions of farmers will be hurt.
For that reason, actively seeking and expanding markets and enhancing the value and quality of agricultural products are a vital task to adapt to the new situation and to restructure the agricultural sector, Minister Phat emphasised. In the coming months, the Ministry of Agriculture and Rural Development will focus on removing difficulties, particularly in market diversification for fresh goods; and will accelerate restructuring to diminish dependence on China.
In a scheme aimed at increasing the added value for processed agricultural, forest and aquatic products and reducing post-harvest losses recently approved by the Ministry of Agriculture and Rural Development, the main objectives are:
- By 2020, the added value of agricultural, forest and aquatic products will be 20 percent higher than now. Specifically, the added value of rice will increase 20 percent, the value of coffee will climb 13 percent, the value of tea will jump 30 percent, and the value of seafood will leap 20 percent. Post-harvest losses will be cut by a half from current levels.
- Technology and equipment will be invested to treat and take full advantage of waste agricultural products to create highly valued products.
- Big, prestigious brands will be facilitated to build processing facilities. By 2020, 40-50 percent of exporters will sell their products in the EU, the US and Japan.
Nguyen Thanh
Vietnamese
