VIETNAM AGRO-PRODUCTS EXPORT: OPPORTUNITIES AND CHALLENGES
IN THE DOMESTIC AND INTERNATIONAL CONTEXT IN THE LAST QUARTER OF 2022
The annual export target for the agriculture sector was be a topic of attention for news agencies and the press during the Ministry of Agriculture and Rural Development (MARD)’s monthly press conference in September 2022.
The government set an export goal of $50 billion for 2022 as a result. However, MARD authorities have consistently predicted that the agriculture sector will meet and surpass this figure right from the middle of the year. The overall export turnover of agriculture, forestry, and fisheries might reach a record high of $55 billion if there are no abrupt changes and production speeds remain consistent, as they were in the first nine months of the year.
Deputy Minister Phung Duc Tien pointed out opportunities and challenges in the current domestic and international context.
Opportunities and challenges in the domestic and international context
Deputy Minister of Agriculture and Rural Development Phung Duc Tien expressed optimism about this possibility and highlighted the existing potential. The foreign exchange rate is the first opportunity. Exporters will be “supported” by the fact that Vietnamese goods will become less expensive in the international market as a result of the USD price’s ongoing growth, which has now breached the threshold of 24,000 VND/USD.
The US Federal Reserve (FED) is expected to keep raising deposit rates, therefore this process is expected to last until 2023. This indicates that the price of the USD is continuing rising. On the other side, the current account deficit is pressuring the VND to decline, which would assist export goods to reach more people.
Another reason mentioned by the Deputy Minister of MARD is that the demand for food and foodstuffs in Western countries always increases in the last three months. This is an occasion for Europe and the United States to have many holidays such as Christmas, and New Year … and helped the agricultural industry grow “rapidly” at the end of 2021.
Vietnam has significant advantages in coffee, rubber, shrimp, wood, and wood products among seven agricultural, forestry, and fisheries items or categories with an export value of over $2 billion. Additionally, the approximately $2 billion in annual pangasius exports from Vietnam are seen as holding a distinct place in the market.
Despite having numerous benefits, Vietnam’s agriculture business must prepare for certain difficulties. The MARD’s top officials brought up global inflation as well as the escalating Russia-Ukraine conflict. Consumers frequently restrict their meal choices due to the unpredictability of geopolitical conditions, which reduces the market share and increases inventory.
Importers should prepare for challenges domestically owing to cost pressure and rising currency rates. The Deputy Minister claims that the short-term cycle must be taken into account when calculating cash flow and the trade balance.
Recommendations from the Deputy Minister
Deputy Minister Phung Duc Tien advised firms, cooperatives, and individuals to fully utilize local raw resources and byproducts after honestly evaluating the existing circumstances. To create and form industrial-scale chains and chains, parties must simultaneously encourage innovation, improve public-private collaboration, and use science and technology.
On the side of MARD, he is committed to continuing administrative reform with huge digital transformation, creating investment attraction for businesses in the locality. MARD is creating investment promotion programs in Dak Nong and Dong Nai provinces to form raw material areas with full information, proactively connecting with the consumption market by deep processing.
In the Report on industrial production and commercial activities in the first nine months of 2022, the Ministry of Industry and Trade said that the country’s export turnover of goods reached about $282.52 billion, increasing 17.3% over the same period last year. The domestic economic sector reached $73.22 billion, up 16.4%, accounting for 25.9% of total turnover.
Corn silage export of Kotinochi
32 items had an export turnover of over $1 billion after 9 months, making up 92.8% of the whole export turnover. 6 products account for 63.9% of the export revenue and have an export turnover of exceeding $10 billion.
The Ministry of Industry and Trade will make plans to open up, encourage the growth of the home market, and support trade and exchange operations after deciding that the final three months of 2022 will be crucial. In order to take proactive steps to limit inflation and stabilize the economy, the Ministry and its associated organizations will also constantly monitor movements in supply and demand, financial, monetary, and commodities markets.
