Domestic companies have not taken full advantage of the incentives offered by preferential tariff policies for Vietnamese firms to sell products to South Korea, according to the deputy director-general of the Asia-Pacific Market Department under the Ministry of Industry and Trade (MoIT).

Le An Hai said that South Korea could be a great market for Viet Nam’s agriculture, forest and fishery exports, but Vietnamese agricultural exports accounted for only a small amount of South Korea’s total agricultural import value, which was around US$100 billion last year.

Hai spoke at a seminar on promotion of processed Vietnamese food, seafood and agricultural product exports to South Korea held in HCM City yesterday.

Reduced tariffs are available under the Viet Nam-South Korea Free Trade Agreement, which came into effect in December 2015, and the ASEAN-South Korea Free Trade Agreement, offering opportunities for Vietnamese exports.

“Though China is still the most important market for Viet Nam’s agricultural products [it imported $16 billion worth of Vietnamese agro-forest-fishery products last year], South Korea is one of our top priority markets,” he said.

“Like Japan, Australia and New Zealand, South Korea is a very strict market in terms of required quality for imported products. If we can win over these markets, we can access many other markets more easily,” he added.

According to the General Department of Customs, last year Viet Nam imported $32 billion of South Korean products, up 15.9 per cent year-on-year, while exports were worth $11.4 billion, up 28 per cent year-on-year.

In the first six months of the year, bilateral trade between Viet Nam and South Korea reached $29.1 billion, up 45.5 per cent compared to the same period last year.

The MoIT is launching many efforts to help local firms enhance exports of Vietnamese agro-forest-fishery products to South Korea to achieve bilateral trade value of $70 billion by 2020.

Products with potential

Yoon Byung Soo, product strategy director of Korean conglomerate Lotte Mart Viet Nam, said that Vietnamese dried mango, dragon fruit, coconut-related products and coffee were favoured by many Korean consumers.

“Since Viet Nam has many fruits that South Korea cannot produce, our supermarket chains are very interested in these products,” he said.

Yoon said that bananas were a potential product for South Korea because Vietnamese bananas have good quality and a competitive price similar to the Philippines’, which is a main source of imports for Korea.

“Recently, our team from Korea visited Viet Nam and signed a contract to import 100 tonnes of bananas,” he said.

However, he said that Vietnamese banana growers should pay more attention to ensuring consistency in the quality of bananas year-round as well as the hygiene of farms.

Another issue is the hiring of under-aged workers by farmers during harvest season, he said, adding that the owners of the farms could be fined for doing so and the reputation of the buyers could be damaged.

He said that Vietnamese firms should also improve product labels and packaging.

Yoon said that he noticed that some Vietnamese product packaging had colourful labels, but foreign consumers preferred labels with basic colours.

Changing designs of packages could increase sales of products significantly. One example was the new label for Cuc Da tissue, which increased sales by 80 per cent in only three months.

Yoon said one of the good points of Vietnamese products was the competitive price. However, to enter a market and win it over, especially through a supermarket chain, the products should be unique.

"If the firms sell the type of products that are very common on the market, they will find it more difficult to compete with others that entered the market before them," he added. — VNS