Enterprises seek new direction for agricultural products

Tuesday, 2020-04-14 18:00:37
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Shrimp processing at Minh Phu Seafood Corporation in Ca Mau province. (Photo: NDO)
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NDO - The increasingly widespread COVID-19 pandemic has greatly affected the operation of a number of Vietnamese agricultural exporters. It is essential for enterprises to receive support from local governments and look for a new direction for their products.

Afflicted business

According to Ngo Minh Tuan, Director of Tuan Hien Aquaculture Company in Phu Thanh commune, Tan Phu Dong district, Tien Giang province, the number of orders has decreased over the past month because of the decline in shrimp consumption in China, the US, the EU, and the domestic market which are all affected by the pandemic.

Currently, shrimp exporters have to increase their storage costs for the frozen shrimp at cold warehouses, resulting in a reduction of the price of whiteleg shrimp in Tan Phu Dong district to VND135,000 per kg from VND160,000 per kg previously. Several traders have also reduced their purchasing volume of shrimp by 50%.

Due to the pandemic, the company has also planned to cut down its farming volume and the output in 2020 is projected to fall by 100 tonnes compared to 2019.

In Ca Mau province, the price of raw shrimp is at its lowest level in recent years while seafood exports have also plummeted in both volume and revenue. Local enterprises said that the number of orders has decreased by more than 50% in addition to large inventories costing enterprises quite a lot in storage fees.

If this situation continues, it will push enterprises and 150,000 local shrimp farmers into difficulties.

Fruit export companies have also faced many obstacles. My Xuong Mango Cooperative in Cao Lanh district, Dong Thap province, which is a trade centre for mango production and export, has also encountered many difficulties due to the pandemic and limited trade from all markets.

Director of the cooperative Vo Viet Hung said that the amount of exported mangoes is now very low because import partners have stopped or reduced orders. They have switched to the domestic market but the consumption is insignificant because they have yet to connect with major supermarkets or food stores.

The current price of mango has decreased by about VND10,000 per kg, causing losses for both mango growers and exporters. This is a common situation of many types of fruits in Mekong Delta provinces at this time.

Supporting enterprises to overcome difficulties

According to the Ministry of Agriculture and Rural Development, export turnover of agricultural, forestry and aquatic products was estimated at US$9.06 billion in the first quarter of 2020, equivalent to the same period last year.

However, many groups of goods have seen decreasing export turnover. The main agricultural products reported a 3.1% year-on-year decrease, aquatic products posted a 14% year-on-year decrease and husbandry witnessed a 21.8% year-on-year decrease.

The reduction can be mainly attributed to market and demand fluctuations due to the impact of the pandemic.

Director of Coffee 15 One Member Limited Liability Company in Dak Lak province, Pham Xuan Thanh, said that the price of coffee has fallen by 20% compared to the end of 2019 and there is no sign of recovery. The reason is due to the declining demand in almost all markets and the interrupted circulation of goods. In the future, businesses will need support from the industry association and the State's policies to boost export activities, Thanh noted.

Many seafood enterprises in Ca Mau province have also proposed an increase in minimum loan levels so that they can buy raw materials for processing due to a lack of financial resources caused by declining exports. They also suggested the rescheduling of loan repayment deadlines and the reduction of interest rates in accordance with the policy of the State Bank of Vietnam to help businesses re-invest in their projects.

In Quang Tri province, the administration is implementing many solutions to ease difficulties to enterprises, such as adjusting production plans in accordance with market demands and resolutely handling acts of profiteering, price manipulation, and trade frauds to prevent psychological confusion among producers and consumers.

In particular, the province created a policy of exempting periodic evaluation fees for food safety conditions for agricultural, forestry and fishery companies and created favourable conditions for enterprises to access concessional loans for production.

The Ministry of Agriculture and Rural Development said that it will continue to implement plans to export agricultural products to China when its demand for goods increases thanks to the control of the pandemic. At the same time, the ministry will focus on addressing technical barriers and negotiations for market expansion to the EU, the US and some other markets.

The COVID-19 pandemic is forecast to continue causing new difficulties for the export of goods, including agricultural products. Therefore, besides the support policies being implemented by authorised agencies, businesses need to restructure their production and direction at present to proactively respond to global fluctuations and risk.