VN produce losing their edge

Wednesday, Jun 10, 2015 08:00

The competitiveness of Vietnamese agricultural products is decreasing in the global market. — Photo baogialai

HA NOI (Biz Hub) — The competitiveness of Vietnamese agricultural products, including seafood, is decreasing in the global market, leading to a sharp fall in exports, experts warn.

Agriculture contributed just 0.28 per cent to the gross domestic product (GDP) growth in the first quarter of this year, the lowest since 2011, it was reported at a workshop held by the Institute of Policy and Strategy for Agriculture and Rural Development under the Ministry of Agriculture and Rural Development last Saturday.

Institute Director Nguyen Do Anh Tuan said the fall in shipment was not being rectified, and noted that the dropping demand had been compounded by the emergence of strong rivals that left local products struggling to compete.

Unlike Viet Nam, other countries float their currencies, which makes foreign products cheaper, as is evident with coffee, shrimp and tra fish, according to Tuan.

Cambodian and Myanmar rice now are deemed of high quality, and they can easily outperform Viet Nam in the Chinese market.

The competitiveness of Vietnamese agricultural products is decreasing in the global market. — VNS Photo Truong Vi

Coffee exports, another currency earner for Viet Nam, has been affected by Colombia's success in a re-cultivating programme that has made its coffee more competitive than the Vietnamese product in both price and quality, he said, adding that Brazil has also cut down prices to reduce its inventory.

Vietnamese tra fish now has to compete with white-fleshed fish, which has strongly developed in other countries, while more shrimp products from India, Thailand, Indonesia and Mexico are hitting supermarket shelves in the US.

Local fruits that are traditionally prominent in China, like lychees, plums, dragon fruit and watermelons, are also facing challenges, as the northern neighbour is rapidly expanding fruit cultivation, enabling it to export its fruits to Viet Nam, instead of the other way around.

Other workshop participants expressed concern about the quality of Vietnamese produce and "misguided" strategies that inhibit the nation's ability to meet global demand. For example, Viet Nam has mostly shipped Robusta coffee while foreign markets prefer Arabica.

They also pointed out a lack of market information, especially relating to China, which further dulls Vietnamese edge in this critical market.

It would be hard for Viet Nam to supply higher quality goods at lower prices unless it makes scientific and technological breakthroughs in agriculture, Tuan said.

Director of the Centre for Agricultural Policy, Dang Kim Khoi, stressed the need to promote production of quality goods, saying Viet Nam should step up coffee re-cultivation and the planting of first-rate rice varieties, control the expansion of rubber plantations and the supply of tra fish.

He also called for developing a support industry and processing technology.

Other experts suggested the country provide aid to exporters to counter exchange rate impacts. The aid can be in the form of reduced value added tax and enterprise income tax, widening credit limits and making interest rate adjustments. — VNS

Comments (0)