Alain Chevalier

Senior Technical Advisor

Nguyen Thi Minh Thuy

Deputy National Program Director

VIETRADE EXPORT EXPERIENCE OPPORTUNITIES AND CHALLENGES IN AGRICULTURAL EXPORTS

General Economic Factors

China Vs. VIETNAM

CHINA VIETNAM

Population 1,380 million 93 million

GDP per capita USD 6,500 USD 1,685

GDP Growth rate 1.7 % 6.7 %

Inflation 2.3 % 2.8 %

Exports USD 2,011 billion USD 169 billion

Imports USD 1,437 billion USD 161 billion

Importing from: South Korea, US, Japan,

Germany, Australia

China, South Korea,

Japan, Taiwan, Thailand, US

Exporting to: US, Hong Kong, Japan,

South Korea

US, China, Japan, South

Korea, Hong Kong,

Netherlands

Vietnam Agricultural Sector

STRENGTHS:

• favorable natural conditions but serious climate change threat

• abundant labor (47 % VN labor force)

• low production cost

• high yield in most plants

WEAKNESSES:

• small scale and scattered production

• weak rural infrastructure

• most products are raw products

• post harvest technologies

• processing technology,

• quality management, certification of quality and food safety

• trading and distribution networks

• value chain integration (linkages)

• no market research, no market planning,

• branding

Vietnamese Agricultural Production &

Exports 2016

Agricultural production:

• rice, coffee, rubber, tea, pepper, soybeans, cashews, sugar cane, peanuts, bananas; poultry; fish, seafood

Agro-forestry-fishery exports

• increased to USD 32 billion (in spite of natural disasters)

Vietnamese Agricultural Production &

Exports 2016

Fruits and vegetables

• Vietnam exported USD 2.4 billion

• High world demand but price and quality competition

• Major obstacle: non-tariff barriers

• Vietnam has diversified products and markets (76 countries)

• China market continues to be the main export market (32% of Viet Nam F&V exports)

• Other countries importing from Vietnam: Japan, US, EU, Korea, Russia, Middle East

• High Vietnam transport and distribution costs

• Preservation technology

Vietnamese Agricultural Production &

Exports 2016

Viet Nam export growth in coffee, cashew nuts, pepper

Fishery exports: USD 7 billion

• Shrimp exports USD 3.2 billion

• Catfish exports USD 1.7 billion

Pigs exports 30 million heads (USD 1 billion to China)

Poultry exports 365 million heads

Export experience of

SECO-VIETRADE Program

LYCHEE: • China, EU (France, Netherlands), US, UAE, Korea, Russia

TEA

• Viet Nam 7th largest producer of tea in the world

• But 90 % of tea exports are of material not of finished

product (input to other countries tea industry no image in

world markets

• Green tea: China is no.1 producer, Viet Nam no.2

• Viet Nam challenges: low quality, low unstable export

price, outdated processing technology, harsh competition,

• Exports are 28 % of Viet Nam tea exports

• Main markets: Taiwan, Russia, Pakistan, Indonesia, US,

Germany, Poland, UK, Singapore, China

• China is a competitor to Viet Nam (very competitive

prices but non transparent management; it imports USD

28 million in bulk)

Export experience of

SECO-VIETRADE Program

OTHER FRESH FRUITS

• Main Viet Nam markets: China, Hong Kong

(trans-shipped to China), Korea, Japan, US,

Australia, EU

• Pomelo US, China, Russia, India

• China is a large exporter (16 % of world market)

and cheap but less taste and less juice than Viet

Nam pomelo

• Dragon fruit EU, China (had high demand in 2012-

2014 but started planting and prices went down),

Korea, Japan, US

• Mango: Korea, Japan, Australia

Export experience of

SECO-VIETRADE Program

SEAFOOD

•World exporters: China, Norway, Thailand, Vietnam (in this order)

•Dramatic expansion of aquaculture and consumption in China, China is now largest world exporter and 3rd largest world importer; in 2013, China exported USD 20 billion and imported USD 8 billion

•Fresh tuna

• Viet Nam ocean tuna from off shore fishing

• Viet Nam tuna output much smaller than US, Thailand, the Philippines, Ecuador

• Viet Nam tuna is of very high quality

• World demand is very high

• Main Viet Nam export markets: US, Japan, ASEAN, Israel, Tunisia, Canada, Mexico

• Tariff preferences are a strong competitive advantage

•Pangasius (“catfish”)

• Viet Nam is leading world exporter

• Frozen pangasius fillet is 81 % of market

• Main Viet Nam export markets: EU (Spain, Netherlands, Poland, Germany), US, China, Mexico, Southeast Asia

• China is still a small exporter

Export experience of

SECO-VIETRADE Program

PEPPER

• Vietnam is no. 1 world exporter, China is a competitor but

only relatively small producer

• Export prices are low, 86 % of Viet Nam exports are raw pepper

• Main Viet Nam markets: US, Germany, UAE, Netherlands, UK, Japan, Singapore, France, India, Egypt, Spain

• China had a 20 % import tax from VN in 2014

• China share in Vietnam import markets: US (8%), Germany (13 %), Singapore (8 %), Russia (16 %), Spain (big share)

Conclusion

China is a huge producer and consumer of agricultural products & a good potential export

market for most Vietnamese agricultural products

Chinese consumption habits are similar to Vietnamese

Being near to Vietnam, two-way trade is easier and cheaper than with most other countries

Two serious problems remain in the two-way trade: quality and informal trade.

Vietnamese consumers need quality assurance for goods imported from China.

Vietnamese exporters cannot learn good practices of quality management in export trade if

their exports to China are not in conformance with international standards

Informal distribution channels to China are not a good learning experience for Viet Nam

on other international markets

For many Vietnamese exports of agricultural products, China is both an importer and com

petitor on export markets. Chinese prices and quality are often lower than in international

markets

Vietnamese exporters have to do serious market research and market planning when

exporting to China.

China import duties are not significant for Vietnam agricultural exports to China

THANK YOU

The Program Management Unit

Vietnam Trade Promotion Agency, MoIT

4th floor, VIETRADE office, 20 Ly Thuong Kiet Street, Hoan

Kiem District, Ha Noi

Phone: 04.3934 7628 (ext: 89) Fax: 04. 32668533

Email: duan_sme@vietrade.gov.vn