Farm produce: selling much, but making little profit

21-Aug-2019 Intellasia | VNS | 6:02 AM Print This Post

Official reports all show that exports of farm produce have increased sharply since the beginning of the year, but the value is very low.

The latest report of the agriculture ministry shows that Vietnam’s farm, forestry and seafood produce export turnover in July reached $3.55 billion. Of this, major farm produce exports brought $1.64 billion, forestry products $893 million, seafood $785 million and livestock products $63 million.

As such, the total export turnover of farm, forestry and seafood produce in the first seven months of the year hit $23.3 billion, an increase of 2 percent over the same period last year.

The report clearly showed that the export value of major farm produce items increased most sharply, reaching $6.01 billion, an increase of 17.3 percent. Of this, wood and woodwork alone brought $5.6 billion, up by 16.1 percent.

Meanwhile, seafood, the second important export item of Vietnam, saw decreases. The seafood export value in the first seven months of 2019 was $4.68 billion, a decrease of 1 percent from the same period last year. Catfish export turnover brought $1.16 billion (- 3.2 percent) and shrimp $1.73 billion (- 10.4 percent).

As for major farm produce, the export value was estimated at $10.84 billion with five groups of products having the export value of over $1 billion, including coffee ($1.8 billion), rubber ($1.1 billion), rice ($1.73 billion), cashew nuts ($1.8 billion) and vegetables ($2.3 billion).

The noteworthy feature is that while the export volume soared, the export value decreased sharply. The rubber export volume, for example, increased by 10.7 percent, while rice 2.1 percent, cashew nut $13.3 percent, and pepper 32.5 percent. However, because of the export price decreases (20.6 percent in cashew nut price and 16 percent in rice), the export turnover of major farm produce still fell by 8.2 percent.

Experts commented farmers are selling much, but making little profit.

Hoang Trong Thuy, a respected agriculture expert, said the results were foreseeable. Vietnam has been expanding the growing area of major farm produce rapidly, but the quality has not been improved.

Meanwhile, Vietnam is weak at post-harvesting technologies, which explains why it doesn’t have many processed products. It mostly exports raw materials or preliminarily processed products.

This can be seen most clearly in coffee and pepper. Vietnam is the biggest exporter of coffee and pepper in terms of export volume, but it doesn’t have strong coffee or pepper brands in the world market.

According to Vietnam Coffee and Cocoa Association (Vicofa), Vietnam is the biggest exporter for the South Korean market (11,000 tonnes in H1), but the export price was $1.8 per kilogram only, half of the country’s average import price.


Category: Economy, Vietnam

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