Agricultural Sector Set to Export US$55 Bln

Despite the anticipated difficulties in the last six months of 2023, the agricultural sector is determined to achieve all targets, disburse all public investment as planned and boost exports to US$55 billion in the year

In the first six months of 2023, the country exported 4.27 million tons of rice worth US$2.3 billion

According to Deputy Minister Phung Duc Tien’s announcement at the regular press conference on the first half performance of the Ministry of Agriculture and Development on July 3, 2023, the GDP growth of agriculture, forestry and fishery was as high as 3.07% in the first six months of the year. Particularly, agriculture, forestry and aquaculture expanded by 3.14%, 3.43% and 2.77%, respectively.

Praiseworthy public investment disbursement

Mr. Vu Van Viet, Director of the Planning Department under the Ministry of Agriculture and Rural Development, said that the production value of agriculture, forestry and fishery was estimated at 3.1%. Particularly, agriculture grew by 3.14% (cultivation by 2.11% and animal husbandry by 4.88%), forestry by 3.43% and fishery by 2.96%.

The Ministry of Agriculture and Rural Development was one of Top 5 ministries/sectors to have the highest disbursement of public investment in the country. The ministry was allocated VND9,852 billion in 2023, including VND8,052 billion of domestic capital and VND1,800 billion of foreign capital).

In the year to June 30, the ministry was estimated to disburse VND3,098.3 billion or 31.4% of the plan.

By June 30, Vietnam had met new rural development standards in 6,011 out of 8,177 communes accounting for 73.5%, which is an increase of 0.43% compared to the rate at the end of 2022. Among these certified communes, there were 1,326 communes that met advanced new rural development standards (335 more communes) and 174 communes that were certified exemplary new rural development standards (53 more communes).

Mr. Viet reported that the export value of agricultural, forest and aquatic products was US$24.59 billion in the first six months of 2023 despite a decline of over 11% from the previous year. This was due to active solutions to obstacles and barriers to exports. Agricultural exports stood out with US$12.79 billion, up 12% year on year, and livestock products brought in US$232 million, up 26.5%. However, seafood and forest exports declined. Mr. Trieu Van Luc, Deputy Director of the Vietnam Administration of Forestry, said that the export value of forest products tumbled 28% year on year to US$6.42 billion in the first half of 2023. The agricultural trade surplus was US$5.32 billion, down 30% year on year.

The decline was attributed to tightened consumer spending on wooden furniture in the European Union (EU) and the United States. The price of chips and pellets fell sharply while the cost of inputs hiked amid conflicts. Moreover, exportation was also hit by investigations into tax evasion and antidumping of plywood, kitchen cabinets and dressing tables. In addition, companies faced policy difficulties, social insurance costs and VAT refunds.

Outperforming vegetables and rice

Vietnam’s vegetable and fruit exports may reach US$10 billion a year in the future given its untapped potential for expansion and quality. Mr. Nguyen Nhu Cuong, Director of the Department of Crop Production under the Ministry of Agriculture and Rural Development, stated that the cultivated area will shrink due to industrialization and modernization trends, which may lead to a decrease in fruit and vegetable production. However, if solutions are found to improve product value and quality, plus worthy investments for processing in the future, the export value will still grow.

In contrast to declining industrial production across the country, agricultural production is still good.

 Deputy Minister Phung Duc Tien remarked on the export picture of agriculture, forestry and fishery, pointing out that although the overall value decreased from the same period last year, there are bright spots in some sectors. For example, vegetable and fruit exports jumped 64.2% and rice exports climbed 34.7% to US$2.3 billion.

“Fruit and vegetable exports reached an all-time high of US$2.75 billion in the first six months of 2023. If we keep this pace in the second half of the year, this sector will be likely to bring home over US$5 billion from exports. If we are successful in seedling production, downstream processing and market expansion, the target export value of US$10 billion in this sector will be achievable,” he said.

In 2022, Vietnam’s rice exports reached 7.13 million tons worth US$3.49 billion. In the first six months of 2023, the country exported 4.27 million tons of rice worth US$2.3 billion.

“It is believed that rice yield will decrease in lunar leap years but this was not the case this year because the ministry provided experience and techniques for farmers to boost productivity. This year, the rice cultivated area shrank but the rice production in the winter-spring crop still increased,” he added.

Grasping every opportunity to complete the plan

 Anticipating the export picture in the last six months of the year, Mr. Nguyen Nhu Tiep, Director of the Department of Agricultural Product Quality Management, Processing and Market Development (under the Ministry of Agriculture and Rural Development), said, the market picture has not had clear signs of recovery. Inventories of both importers and domestic exporters remain high while demand is still low.

In addition to the reduced demand, export markets, including the EU, set stricter requirements.

“The EU leads the world in export regulations. Regulations were previously related to food safety but they are about sustainable development. We need regulatory policies on traceability to meet market requirements,” said Mr. Tiep.

“For that reason, apart from commercial factors, companies also need to pay attention to technical issues to expand their export markets.”

When the global and domestic economies continue to confront a lot of difficulties and challenges, agriculture is also being hit by high production input prices, hotter El Nino weather, and water shortage risks for production.

Nonetheless, Deputy Minister Phung Duc Tien emphasized that the agricultural sector is determined to grasp every opportunity and focus resources to fulfill all targets set for this year: GDP growth of 3-3.5%, export value of US$54-55 billion, forest coverage of 42%, and new rural development certified communes of 78%.

“In order to achieve the export value of US$55 billion, the monthly growth will be 7-8%. Marketing will be very important in key export markets. Thus, there is a dire need for solutions to affect key prospective exports to increase the export value to offset products that fail to reach their yearly targets,” he emphasized.

Source: Vietnam Business Forum