7 agricultural exports enter billion dollar club
7 agricultural exports enter billion dollar club
In the year to mid-September, seven of Vietnam’s agricultural export staples have entered the billion US dollar club, which includes commodities that bring in revenues worth at least US$1 billion for the country.
The billion-dollar agricultural products include seafood, rice, coffee, rubber, wood, cashew nut, and manioc.
Some exporters, however, said the high revenues are the result of larger export volumes, while prices have fallen.
The coffee export year for 2011 – 2012 marked a new record for Vietnam in terms of both volumes and values, with exports in the year to August topping 1.26 million tons, and $2.68 billion in revenues, a 30 percent increase in volume, and 25.5 percent jump in value, according to figures from the General Customs Department.
In the period between October 2011 and September 2012, 1.5 million tons of coffee worth $3 billion have been shipped to other countries, the highest amounts ever recorded.
Farmers made a huge contribution to the success, as they have gradually increased prices which global importers have had to accept, according to coffee expert Nguyen Quang Binh.
Unlike coffee growers, farmers of other commodities such as cashew nuts, catfish, rice, and manioc have not benefited much from the huge exports due to slumping prices.
Strategies needed
Vietnam near the top in exporting certain agricultural products, but the country has almost no dominance or sharp competitiveness over the global market, according to agricultural experts.
The reason, they said, is that Vietnam only focuses on increasing export volumes, and neglects the task of building a consistent strategy for exporting agricultural products.
In some commodities, instead of finding ways to increase export prices, local exporters choose to compete by offering lower prices, which thus sends them to buy from farmers at cheap prices.
“Vietnam is one of the only exporters of catfish in the world, but we keep on slashing prices instead of hiking them,” said Deputy Minister of Agriculture and Rural Development Diep Kinh Tan in a recent meeting.
Catfish exports in the first eight months of this year fetched $1.1 billion, but farmers had to incur a VND4,000 loss on every kg of fish they sold, according to Nguyen Van Kich, CEO of seafood exporter Cafetex.
“The problem occurred after exporters offered low prices to their customers, and then reduce buying prices from farmers,” he explained.
In a similar manner, farmers across the country have chopped down their cashew plantations and switched to growing higher-value plants such as pepper or rubber, although Vietnam has topped the world’s cashew nut exporting market for the last five years.
In the rice market, Vietnam too had to suffer customers switching to India or Pakistan, sending prices down due to large unsold stocks.
“We signed a lot of [exporting] contracts, but most of them are of low prices,” said Nguyen Dinh Bich, head of the Market Research Institute.
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