The worry of Vietnamese agricultural products

China is the largest export market of Vietnamese agricultural, forestry and fishery products, but the country is expanding their production, especially agricultural products including watermelon, dragon fruit... This has been affecting the export of Vietnam, posing many challenges for Vietnam's agricultural exports.

Vietnam needs to adapt its production to the market quickly, avoiding excessive dependence on China. Photo: S.T.

"Outreach" the abroad cultivation

Watermelon is one of the Vietnamese typical fruits exporting to China. At the end of April 2017, the Asia-Pacific Market Department (Ministry of Industry and Trade) issued some warning information about the production and consumption of watermelon in China. Specifically, the watermelon production in China has grown steadily in recent years, from 72 million tons in 2013 to 77.5 million tons in 2016. According to the Ministry of Agriculture's plan, every year, China will increase about 1% (about 2.2 million ha) of watermelon and cucumber area in the period of 2015-2020. Remarkably, China is shrinking its small melon-growing areas and replacing them with cultivated areas with good natural conditions, large scale production, and uniformity for high season crops.

Apart from watermelons, the major agricultural products exported through China's “neighboring” market for many years are dragon fruit. Up to 90% of Vietnamese dragon fruits are exported to China. According to the representative of the Plant Protection Department (MARD): China is currently planting dragon fruit in some provinces including Guangxi, Hainan island (now it has more than 20,000 hectares and is expected to reach over 30,000 hectares at the beginning of 2019). In addition, China also "outreaches" abroad by renting area to plant dragon fruit in Laos and Cambodia. This move is expected to affect the export of Vietnamese dragon fruit in the coming time.

Besides watermelon, dragon fruit, China has been promoting farming pigs, pangasius... in order to gradually increase the localization rate and reduce imports. For pangasius product, Mr. Truong Dinh Hoe, general secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP), shared: "At present, China has raised and harvested 10,000 tons of pangasius in Hainan with low stocking density and low price. This shows that China is likely to become a potential pangasius supplier in the world. In fact, China has been the leading market for Vietnam pangasius. Even in 2017, when exporting pangasius to large markets such as the United States, the EU ... is difficult, China is also considered as a "rescue" market for Vietnam pangasius. In that context, efforts to grow pangasius from China are considered by many experts as a big obstacle for our pangasius industry in the future.

According to the Ministry of Agriculture and Rural Development: the export turnover of agriculture, forestry and fishery in 9 months was estimated at 29.55 billion USD, up 9.3% over the same period in 2017. Of which, the export value of major agricultural commodities reached 15.2 billion USD (up 4.4%); the aquaculture export value was estimated at 6.4 billion USD (up 7.2%); the livestock export value was estimated at 0.41 billion USD (up 5.2%); the export value of key forest products was estimated at 6.7 billion USD (up 15.8%). The four main export markets for Vietnam's agricultural, forestry and fishery products are China, the United States, Japan and South Korea, with the market share of 22.9% (up 5.7%), 17.5% (up 7.3%), 8.8% (up 6.6%) and 6.9% (up 31.4%) respectively.

Need to adjust to fit the market

Around the fact that China is boosting production, increasing the autonomy of agriculture, seafood and reducing imports, expert Dang Kim Son, the former Director General of Institute of Policy and Strategy for Agriculture and Rural Development (MARD) evaluated: This is true is many countries importing Vietnam's agricultural products, not just China. In the context of increasing climate change, trade competition..., every country has to adjust the production structure to care for the "stomach" of the country. "In this context, Vietnam must adjust our policy. Not only farmers but also the state and enterprises need to understand, capture information, then adjust accordingly," said Mr. Son.

Regarding this issue, some experts pointed out that market research and assessment plays a very important role. Vietnam should focus more on these tasks to connect with new markets, new segments, and new objects..., beside the Chinese market. According to expert Dang Kim Son: "Vietnam's agricultural products are still competitive with China’s if we decrease the production costs and improve quality and safety. China in particular and countries in general, with their production, labor... cannot have sufficient supply of agricultural products to meet their demand. Markets go from one segment to another, from one standard to another. Vietnam must understand that. The bottom line is not that Vietnamese agricultural products have no market, but rather have to adjust production to suit the market,”

Looking from the angle of exporting dragon fruit to China, the Plant Protection Department said: Currently, the area for dragon fruit in the country has reached 50,000 hectares with output of nearly 2 million tons and this area is increasingly extending. The Department requests the localities to plan the area well for dragon fruit growing, focusing on promoting the production of high quality dragon fruits for export. Particularly, localities need to have policies to attract investment in the construction of processing plants so that they can take the initiative when the market for fresh agricultural products is unfavorable.

In addition to expanding production, China is increasingly strict with agricultural products in general, which creates barriers for Vietnamese agricultural products. Mr. Le Son Ha, head of Plant Quarantine Division (Department of Plant Protection), said, "The Chinese authorities are increasingly strengthening import controls in the form of cross-border trade, improving the requirements of plant quarantine, plant safety as well as traceability for fresh fruit, including the Vietnamese dragon fruit. In the coming time, China will only allow fresh fruit imports through the official channel at the designated ports. Importation in the form of cross-border trade will be prevented step by step. Facing this situation, the Plant Protection Department has recommended that MARD assigns the Department of Agro-product Processing and Market Development to study the market in detail and work with the Ministry of Foreign Affairs to promote negotiations so that the Chinese side can open up their border gates more for allowing the import of fresh fruit, especially the Vietnamese dragon fruit. In addition, the representative of the leaders of the Plant Protection Department has confirmed that they will closely follow and get the information on importing and exporting agricultural products at the border gates, promptly report and propose to MARD solutions to remove difficulties for export agricultural products.