Vietnam promotes export of key agricultural products

The European Union (EU) is Vietnam's leading agricultural export market. The import demand of this market has also begun to increase rapidly because of the control of the COVID-19 pandemic, creating excellent opportunities for Vietnamese enterprises to boost the export of key agricultural products.

The processing of agricultural products at Phong Thuy Agricultural Products Trade Manufacturing Co., Ltd (Lam Dong). (Photo: QUANG HIEU)
The processing of agricultural products at Phong Thuy Agricultural Products Trade Manufacturing Co., Ltd (Lam Dong). (Photo: QUANG HIEU)

According to the Ministry of Agriculture and Rural Development, in the first 10 months of 2021, the export value of Vietnam's agricultural, forestry and fishery products to markets in Europe accounted for 11.4% of the total market share with diverse products such as seafood, rice, and fruit.

This is not a large number compared to the Asian market (42.8% market share) and the American market (30% market share) because of the impact of the COVID-19 pandemic and strict requirements in terms of food quality and safety.

Great opportunity for export expansion

According to Director of the European - American Market Department (Ministry of Industry and Trade) Ta Hoang Linh, the EU is a major export market for Vietnam's agricultural and aquatic products. However, the output and export value of most products remain low, not commensurate with the market capacity and trade relations between Vietnam and the EU.

The EU is Vietnam's fourth largest market of seafood with an annual export value of over USD $1 billion from 2015 to 2019. However, due to the European Commission (EC)’s “yellow card” warning on Vietnamese fishing, the export of this item to Europe has decreased in recent years.

Regarding vegetables and fruits, the EU is also Vietnam's fourth largest fruit and vegetable export market, but Vietnam ranks only 25th among fruit and vegetable supply markets to the EU with a market share of only about 1%.

General Director of Vina T&T Group Nguyen Dinh Tung said Vietnam's vegetables and fruits exported to the EU are mainly fresh, raw and processed products. Deeply processed products are very modest, so the added value is not too high. Therefore, Vietnam's fruit and vegetable market share in the EU is currently small while the market demand is very large.

Therefore, exporters must constantly improve product quality and fully ensure the requirements and standards of the EU to achieve rapid growth, especially as the EU commits to removing 94% of the total 547 tax lines on Vietnamese fruits and vegetables following the effectiveness of the EU-Vietnam Free Trade Agreement (EVFTA).

The EU is also Vietnam's largest coffee consumption market, accounting for nearly 40% of Vietnam’s total volume and 37% of total export turnover. Vietnam's coffee export turnover to the EU has remained at US$1.2 – US$1.4 billion per year over the past five years.

With advantages from the EVFTA, Vietnamese coffee products can increase exports to the EU market in the near future. In addition, Buon Ma Thuot coffee is one of the 39 geographical indications of Vietnam that the EU committed to protect since the EVFTA officially came into effect.

According to the European - American Market Department, the supply of goods to the EU market has been disrupted due to the pandemic which is considered a great opportunity for Vietnamese exporters to take advantage of.

Understanding the market to increase value

One of the long-standing limitations of Vietnamese agriculture is that we are selling what we have without focusing on researching and understanding thoroughly what the market needs. Therefore, the situation of “bumper harvest resulting in declining prices” is still happening in many localities.

Due to the lack of market information, many export agricultural products offered for sale have yet to attract importers, especially in markets with high requirements for quality, design and safety like in Europe.

Vietnamese trade counselor in Italy Nguyen Duc Thanh said Vietnamese businesses need to meet consumer tastes regarding packaging and food safety as well as labour and environment standards. Thanh noted that Vietnamese key products such as seafood, tea and coffee can be promoted further into the Italian market.

Particularly for rice products, there is still plenty of room for Vietnamese rice because Italy is a large importer within the EU. Italy imported about 221,000 tonnes of rice (equivalent to US$174 million) from countries around the world, but it imported only 7,000 tonnes from Vietnam worth about US$5 million, accounting for 3.1% of Italy's total rice import market share. Meanwhile, the imported figure was 70,000 tonnes (equivalent to US$64 million) from Pakistan, 19,000 tonnes (US$21 million) from Thailand, and 16,000 tonnes (US$18 million) from India.

Meanwhile, Vietnamese Trade Counselor in Spain Vu Chien Thang said food safety and hygiene is the top concern for the Spanish market. Seafood exporters such as tuna, shrimp, and squid to the Spanish market need to fully meet standards on food safety and hygiene including catching, preservation, processing and transportation.

In addition, Spain is also increasingly interested in corporate social responsibility in the production and export of goods. Specifically, the employers must commit to ensuring standard working conditions for all workers and safe production in terms of human and environmental protection without using forced labour or child labour.

The EU in general and Spain in particular attach great importance to social responsibility of businesses, considering it as a binding condition in conducting trade transactions. This is an issue that Vietnamese agricultural exporters need to pay specific attention to.

It can be seen that market demand is an important factor to calculate the production and processing planning of agricultural products, especially for a large and demanding market like the EU.

Therefore, Vietnamese relevant ministries and sectors have coordinated in organising many seminars to connect Vietnamese agricultural exporters with this market. Both sides discussed supply and demand issues, legal factors in export activities, consumer psychology, and local culture so that Vietnamese producers and exporters can have a comprehensive view of the EU market in order to effectively conquer this market with all its potential and value.