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The Ministry of Industry and Trade (MoIT) says that export volumes have sharply fallen early this year, while export prices have been unchanged compared to the same period last year, leading to a drop in export value of farm products.
Coffee export dropped by nearly 40 percent, rice by 53.4 percent, cassava and cassava products by 42.2 percent. Only pepper export value maintained a growth rate as high as last year, owing to an increase of more than 50.6 percent in the price of pepper in the first month this year.
Low prices, sluggish market
The MARD and MoIT attributed the falling export earnings in January to prolonged New Year Festival (Tet) holidays and key export items facing market difficulties.
Vietnam’s exporters are predicted to encounter more difficulties in 2012 in boosting farm product exports. Rice export businesses are running short on orders and are confronted with tough price competition from other rice exporters. In January, the price of export rice saw a slight decrease from a month earlier. The main cause of Vietnam’s failure to sign rice export contracts is that its rice price is US$100 per tonne higher than that of India, Pakistan and Myanmar.
During the reviewed period, there were also abrupt fluctuations in coffee price, with a light increase and then a drastic decrease. Coffee export is likely to continue a downward trend in the time to come, as Europe’s economic outlook is gloomy. January’s coffee export reached 170,000 tonnes, worth US$350 million, down 20.9 percent in volume and 15.3 percent in value compared to last January.
In addition, coffee growers are worried about likely reduced output as this year’s early blooming will affect harvest yields.
However, the International Coffee Organization (ICO) says that the export price of coffee will rise in the long run, as coffee is a popular beverage in European nations.
Rubber export also saw a considerable drop in volume and value when Chinese businesses paused importing. Rubber export was estimated at 60,000 tonnes, down more than 19 percent in volume and nearly 39 percent in value from last January.
Among staple farm product exports, only pepper and cashew nut maintained their prices in the global market. Pepper exports hit 4,000 tonnes worth US$30 million, up 29.1 percent in value.
In the early months of this year, Vietnam’s pepper exports are relatively stable, showing good prices. The Vietnam Pepper Association has predicted that, despite likely falling output, prices will continue to soar this year.
Seafood export in January reached US$370 million, down 13.3 percent from the same period last year. Many domestic businesses are showing keen interest in the consumption and payment possibilities of entering the European market, as most countries of the Euro zone are in a fix.
Departments of African, West Asian and South Asian markets under the MoIT recently warned of the tense political situation in the Middle East. Meanwhile, the US and EU have impose an embargo against Iran and are bringing pressure to bear upon other countries, forcing them to stop doing business with Iran. Therefore, Vietnamese businesses need to regularly update their information on the market and political situation in Iran.
EU warning
According to the MARD, many of Vietnam’s batches of fruits and vegetables exported to the European market have been found violating food safety and plant quarantine regulations.
The European Commission (EC) Directorate-General for Health and Consumer Affairs has announced that, as of January 15, 2012, if five more similar cases of violation are detected in Vietnam’s shipments, the EU will ban fruit and vegetable imports from the country.
In the face of this situation, the MARD has asked relevant agencies to intensify monitoring regulations on food safety and plant quarantine for fruit and vegetable exports to EU nations.
If the violations continue, Vietnam will lose a fruit and vegetable export market and the prestige of its farm products will be seriously affected.
The MARD has also requested the General Department of Customs and the Plant Protection Department to strictly control all batches of goods exported to the EU, while calling on domestic businesses to fully tap into the advantages of tropical agriculture and develop highly competitive and safe products to overcome all trade barriers imposed by demanding importers.
In addition, the people need to access information about food safety and plant quarantine in fruit and vegetable production and exports, the MARD notes.
