Vietnam is losing substantial profits to be gained in its coconut industry to other countries by exporting low-value raw coconuts, said an official from the Vietnam Oil Plant Institute, Vo Van Long, at a recent workshop in Ho Chi Minh City.
The two-day workshop organized by the America Non Governmental Organization ACDI/VOCA focused on the status of the coconut industry.
At the workshop, which ended on May 19, Long called on the Government to adopt policies encouraging the export of processed coconut products instead of raw materials.
Long suggested two new products, virgin coconut oil and coco-diesel, which could prove lucrative for Vietnam's coconut industry because of their high value and environmental friendliness.
However, to achieve such a goal, coconut production needs to be stepped up by bringing more area under cultivation and providing farmers with greater incentives to invest in advanced farming techniques, thus increasing the annual yield from 40 nuts per tree to 70.
Coconut trees are mostly being developed in the Mekong Delta region, where farmers have to date cultivated more than 71.1 million trees on an area of 347,000 hectares.
Despite a bountiful material supply, coconut processing factories still have to operate at one-third of their designed capacities because of a lack of input materials.
At present, almost all coconut processors in the region are facing stiff competition from Chinese and Thai traders who are willing to pay high prices for coconuts following crop failures back home.
“If coconut prices remain high until June because of soaring demand from Chinese and Thai buyers, local factories will be forced to lay off half of their employees,” said Suresh Silva, the head of the Sri Lankan coconut processing company., which is struggling to procure raw coconut.
The Sri Lankan-owned SilverMill Holdings Limited Co. is based in the Mekong Delta province of Ben Tre.
Silva said his company has asked the Ben Tre People's Committee to impose export taxes on raw coconut to keep exports down. However, Nguyen Quoc Bao, vice chairman of the provincial People's Committee, said that could only be done by the central government.
"The policy must be applied uniformly throughout the country because if only one province imposes a fee, farmers will take their coconuts to neighboring provinces to circumvent it," he said.
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