VN agricultural exports hit record: achievements and worries

Amid difficulties and disruptions caused by the Covid-19 pandemic, Vietnam's agricultural exports in the first 5 months of 2021 still reached $22.5 billion, up 30.1% year on year.

VN agricultural exports hit record: achievements and worries

In 2020, agriculture was still the mainstay of the economy at a difficult time due to the Covid-19 epidemic.



Specifically, export revenue earned from major agricultural products is estimated at $7.78 billion, 13% up; livestock exports $166 million, 43.9% up; seafood exports $3.24 billion, up 12%; and export value of main forest products at $7.06 billion, up 61.8%.

In 2020, agriculture was still the mainstay of the economy at a difficult time due to the Covid-19 epidemic.

Agro-forestry-fishery exports reached $41.25 billion, up 2.6% compared to 2019. In particular, Vietnam's trade surplus in 2020 was $19.1 billion, including $10.25 billion from agriculture. This was considered a near miracle.

Vietnamese agricultural products are available in 186 countries and territories. Export items with annual revenue of at least $1 billion last year included 7 key commodity groups: Wood and wood products with $13 billion, seafood with $8.4 billion, vegetables and fruits with $3.26 billion, cashews with $3.2 billion, rice with $3.07 billion, rubber and coffee $with 2.38 billion and $2.66 billion.

Since 2015, exports of agricultural products have grown at a rate of 5-7% per year. Specifically, in 2015, the country's agricultural export turnover reached $30.14 billion and rose to $32.1 billion the next year. From 2017 to 2020, export turnover of agricultural products reached $36.37 billion, $40 billion, $40.2 and $41.25 billion, respectively, for each year.

However, the number of billion-dollar export commodity groups is gradually decreasing, from nine groups of goods with export value of over $1 billion in 2015 to seven in 2020.

In the past five years, exports of wood and wood products have made a spectacular breakthrough, from $6.77 billion in 2015 skyrocketing to $13 billion in 2020. At the same time, seafood export value has also been on the rise, from $6.5 billion to $8.7 billion; vegetables and fruits from $1.85 billion to $3.26 billion, and rubber from $1.59 billion to $2.38 billion.

However, export value of some commodity groups such as rice and coffee seem to have "touched the ceiling" when export turnover was nearly unchanged or insignificantly increased. Pepper, cassava and cassava products were no longer named in the billion-USD export item groups last year, with only $666 million and $989 million, respectively.

Annually, Vietnam produces 50 million tons of food; about 5.8 million tons of pork, chicken, beef; 8 million tons of fish, shrimp; and tens of millions of tons of vegetables and fruits. The production capacity of the agricultural sector can meet the needs of 100 million people in the country and have a surplus for export, earning over $41.25 billion a year.

However, most agro-forestry products are exported fresh or preliminarily processed, so the added value is low.

Nguyen Quoc Toan, director of the Department of Agricultural Product Processing and Market Development of the Ministry of Agriculture and Rural Development, said that low-value-added preliminarily processed products account for 70-80%, while deep-processed products with high added value accounts for only 15-30% (depending on product structure).

This leads to the fact that China - known as a market for imported raw agricultural products - accounts for up to 24.6% of Vietnam's total agricultural exports. Meanwhile, a high-end market such as the European Union (EU) and Japan make up only 9.2% and 9.18%, respectively.

Selling value instead of selling price

 

The Ministry of Agriculture and Rural Development has set a target that by 2025, the export value of Vietnam's agricultural, forestry and fishery products will reach $50-51 billion. About 20% of Vietnam's exported agricultural products will be labeled with national brands, and 50% of products traceable. About 50% of the export value will come from processed and deeply processed products.

By 2030, the export value of Vietnam's agricultural, forestry and fishery products is expected to reach about $60-62 billion. The growth rate of export turnover will be about 6-8%/year; about 40% of export products will be labeled with national brands, and 70% of products will be traceable. Sixty percent of the export value will come from processed and deeply processed products.

At the same time, Vietnam will become an exporter of high quality agro-forestry-fishery and food products in Southeast Asia and the world, with a strong position in the global supply chain of agricultural products and food. Vietnam’s agricultural products and food will fully meet the regulations of the import markets.

Instead of exporting raw products, which is called “selling the price”, Minister of Agriculture and Rural Development Le Minh Hoan said that Vietnam can process agricultural products for exports to “sell value”.

According to experts, although agricultural exports have grown well, Vietnam's agricultural products still have many limitations in the world market. For example, exports mainly increased in volume, but the proportion of deeply processed goods with high added value is still low. Export turnover mainly comes from several main commodity groups in some key markets such as China, USA, the EU and Japan, especially the Chinese market.

Agricultural production always faces the impact of natural disasters, climate change, and epidemics. Since 2020, the world has been facing the Covid-19 pandemic, which has been complicated, affecting socio-economic activities around the world.

Without a methodical strategy, and with continued dependence on export of raw and semi-processed goods, it will be very difficult for Vietnam to achieve its set growth target because many commodity groups have almost "touched the ceiling", i.e. peaked in output.

"Sometimes Vietnam tops the world in terms of output, not value," said Minister of Agriculture and Rural Development Le Minh Hoan.

Minister Le Minh Hoan said that the pursuit of the agricultural sector in the coming time is to increase the proportion of value-added products. “We will sell value, not price anymore,” he said.

Tam An

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