Improved farming quality necessary to raise exports
Improved farming quality necessary to raise exports
Vietnam’s agricultural producers should enhance the quality of their products to meet the European Union’s stringent requirements, which will help them increase their exports to the bloc while enjoying tariff incentives, thanks to the freshly signed trade pact, heard a conference today.
The Vietnamese Ministry of Industry and Trade and the Delegation of the European Union to Vietnam held a conference, called “EU-Vietnam Free Trade Agreement (EVFTA) – a new horizon for extensive and comprehensive cooperation,” in HCMC today, July 30.
Dang Phuc Nguyen, general secretary of the Vietnam Fruit and Vegetables Association (Vinafruit), said that the turnover of fruits and vegetables shipped to European countries was modest in recent years, which was not on a par with the potential and advantages of Vietnam’s tropical produce.
Citing data, Nguyen claimed that the export value of Vietnamese produce to the bloc ranged from US$94 million in 2016 to US$116.5 million in 2018, accounting for only 3% of the country’s total exports of farm produce. The figure for the first half of 2019 was also modest, at just US$78 million.
“The signed EVFTA is expected to open up export opportunities for Vietnamese firms,” he remarked, but noted that the export of produce to Europe is still facing daunting challenges, especially in terms of technical standards.
European countries have set strict criteria on chemical residues in agricultural products. The type and amount of chemicals used in cultivation is also regulated in some countries.
If certain shipments do not exceed their residue threshold but the number of chemicals used does, they are not eligible for exports.
Therefore, only firms that have their own input material zones that are strictly supervised can meet the requirement.
In addition, European consumers typically opt for processed foods rather than fresh produce. For example, Vietnam’s whole pomelo fruit is less popular than Thailand’s frozen sliced pomelo due to the convenience for local customers.
The problem is that processing technologies in Vietnam remain weak. Besides the limited number of processing facilities, there is also a dearth of appropriate techniques and technologies for preservation and deep processing.
More investments in agriculture are needed to develop the fruit processing industry for exports to Europe, said Nguyen.
A representative of the pish Embassy in Vietnam added that Vietnamese farming products sold to the bloc have had low added value and do not bear any brand names.
The representative added that a number of businesses from Spain have expressed interest in Vietnam’s food processing market, and some have set up processing facilities in the country to serve locals and ship their products to other countries.
Local businesses should obtain a thorough understanding of market, rules on origins and the regulations of the bloc to carry out long-term strategies and gain a firm foothold in the market, stated Miriam García Ferrer, head of the Trade and Economic Section of the Delegation of the European Union to Vietnam.
Jean-Jacques Bouflet, vice chairman of the European Chamber of Commerce in Vietnam (Eurocham), claimed that with the EVFTA and the EU-Vietnam Investment Protection Agreement, investment flows from the bloc will move to Vietnam, with a focus on clean energy, agriculture and food production.
He referred to a survey by the German Chamber of Commerce in Vietnam, pointing out that 55% of German enterprises operating in the Southeast Asian nation were planning to expand their operations.
The official stressed that European enterprises want to boost the building of production chains with local firms, creating more chances for local partners to participate in value chains.
To bring into full play these opportunities, Vietnamese enterprises should actively revise their production and management methods to attain the standards and match the development trends of their European partners, he added.
Speaking at the event, Deputy Minister of Industry and Trade Hoang Quoc Vuong said bilateral trade between Vietnam and the bloc had increased from US$4.1 billion in 2000 to US$55.8 billion in 2018, of which US$41.9 billion came from Vietnam’s exports.
