South Korean businesses plan to boost export to Vietnam

aT, a South Korean farm, seafood and foodstuff distribution corporation, has publicized a plan to diversify agricultural exports to markets listed in the ROK government’s New Southern Policy and New Northern Policy

aT also stated that the number of ‘K-Fresh Zones’, or fresh farm produce points of sale, will increase to 30 in five countries and territories, including Vietnam. It will promote cargo transport support to boost the export of fresh farm produce to ASEAN countries.

The news has caused concern among Vietnamese businesses and farmers as they understand that cutthroat competition between importers and domestic producers will worsen.

For many years, Vietnamese farmers have suffered anxiety that selling prices would fall dramatically because of oversupply. As a result, they have had to sell farm produce below production costs. 

The oversupply is so serious that ministries and branches have called on people to buy products to help ease farmers’ losses. The value of these vegetable, pork and fruit ‘rescue campaigns’ is estimated to hit several billion dollars a year.

While Vietnam’s farm produce is thrown away or used to feed cows, imported farm produce continues to flow to the domestic market and sell well.

A report from the Ministry of Agriculture and Rural Development (MARD) showed that the total value of vegetable and fruit imports in the first 11 months of 2018 was $1.57 billion, an increase of 11.5 percent over the same period 2017.

Thailand was the biggest vegetable and fruit exporter of Vietnam with 41.3 percent of market share, while China second with 24.4 percent. 

Meanwhile, imports from Chile see the highest growth rate of 98.3 percent. The figures are 90 percent from the US and 83 percent from South Korea.

Even rice and tropical fruits, Vietnam’s traditional products, are feeling the heat from imports.

Analysts estimate that Vietnamese spend VND91 billion a day to buy and use imported vegetables and fruits, mostly from Thailand and China. This means that for every three units of export value Vietnam earns, it spends one unit for imports.

Imports, with high selling prices, were once mostly sold via supermarkets and luxury fruit shops. However, imports now are available at traditional markets, where most Vietnamese shop. 

South Korea remains by far the largest foreign investor in Vietnam, having registered to pour 65 billion USD into 7,080 projects in Vietnam as of the end of July 2018. 

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