Yuan depreciation worries agricultural exporters
Yuan depreciation worries agricultural exporters
Farm produce exporters have expressed worries about the declining export revenues as a result of the recent China's record depreciation in yuan, according to VnExpress online.
Nguyen Van Duong, the director of agricultural product processing firm Minh Lam, said he was a little apprehensive because none of his veteran Chinese partners had bought cucumbers from his company since mid-August.
The Ha Noi-based company exports 300 tonnes to 400 tonnes of vegetables to China every year, and as part of its trading plans, some of the partners should have arrived at Huu Nghi border gate to buy 50 tonnes of its salted cucumbers on August 15.
"We have been waiting for long but are yet to see them come. We are not sure if there is a problem," Duong said, adding that the slowing down of the exports would affect the company's sale and storage schedules.
Duong speculated that the tardiness was because the depreciation of yuan had put the Chinese partners at a significant disadvantage in goods transactions, especially when Minh Lam trades with them at the border gate with the Vietnamese dong.
Another farm produce company, Mai Huong, in the Mekong Delta, exports on an average three to four million tonnes of rice to China yearly.
Mai Huong Director Tran Phuoc Long said what worried him the most now was that Vietnamese rice was likely to lose its competitiveness. The disadvantaged Chinese importers were certain to diversify their sources of import by turning to other countries such as Thailand, the Philippines and Cambodia to assure their profits.
"Chinese partners are asking Vietnamese enterprises to either slash prices or terminate existing contracts, otherwise they will reduce import quantities or look for other exporters," he said.
Thanh Ha Company in the northern province of Hai Duong, which exports agricultural products to Australia, South Korea and Germany via a Chinese intermediary, is also facing a decline in export turnover due to payments in yuan.
The company's director, Nguyen Thi Man, said her firm would have to reconsider goods and markets for more stable exports.
Tran Ngoc Hiep, chairman of the blue dragon association in the south-central province of Binh Thuan, said prices of this fruit were quite stable during the last two weeks despite a weaker yuan, thanks to demand being more than supply.
Hiep said these prices could fluctuate in the next 10 days, when a new blue dragon harvest begins. However, he expected little change in prices as Viet Nam was almost the sole seller of this fruit, leaving China hardly with a chance to source it from other countries.
China devalued the yuan by a cumulative 4.6 per cent this month, the sharpest Chinese currency depreciation in the last two decades.
