What opportunities for Vietnamese agricultural products in the market of 2.2 billion people?

Market opportunities

At the Conference "RCEP - UKVFTA Opportunities to promote the value chain of Vietnamese agricultural products to the world market" hosted by the Vietnamese Farm and Agriculture Enterprise Association (VFAEA), Vietnam Chamber of Commerce and Industry at Ho Chi Minh City (VCCI), Vietnam Fruit and Vegetable Association, recently held in Ho Chi Minh City, Mr. Le Duy Minh, President of VFAEA, said that RCEP is considered as the largest FTA in the world, with about 2.2 billion consumers accounting for about 30% of global GDP (US$26.2 trillion), is expected to bring a new landscape and a new structure for regional and international trade.

The RCEP is expected to open up great opportunities for agriculture, forestry and fisheries (AFF), because this is a very large market with many important markets for Vietnam's AFF exports in recent years such as China. Korea, ASEAN, Japan, Korea ...

Msc. Nguyen Anh Dung (Department of Agricultural Product Processing and Market Development, Ministry of Agriculture and Rural Development), said that China is the second largest AFF market of Vietnam after the US. In 2020, the export of AFF to China was estimated at US$10.36 billion, accounting for 25.14% of the total export value of Vietnam's main AFF.

ASEAN is the fourth largest market for Vietnam's AFF. Total AFF export turnover to the ASEAN market in 2020 was estimated at US$3.69 billion. Japan is the 5th largest AFF export market of Vietnam, accounting for nearly 10% of total turnover. In 2020, the export of AFF to Japan was estimated at US$3.42 billion. Korea is the 7th largest market, accounting for nearly 7% of the total AFF export turnover. In 2020, the export of AFF to South Korea was estimated at US$2.34 billion.

In addition, RCEP will also create better conditions to open new markets for many agricultural products. According to Mr. Tran Le Nguyen, General Secretary of the Vietnam Fruit and Vegetable Association, China has officially licensed the import of only 10 kinds of Vietnamese fruits. With RCEP, the negotiation to officially export to China other fresh fruits and vegetables such as durian, passion fruit, pomelo, avocado, breast milk, plum (whip)... will be more favorable. The same is with other markets such as Japan, Korea, Australia, Thailand, Malaysia, New Zealand.

It is expected by many Vietnamese agricultural and vegetable exporters that through commitments to open new markets for goods, services, investments within RCEP, together with trade facilitation measures of member countries, this FTA will also provide opportunities to develop new supply chains.

A solid foundation for agriculture

Besides favorable conditions, Vietnam’s AFF will also face strong competition from many countries in the RCEP. The Ministry of Industry and Trade said that many partners in RCEP such as Thailand, China, ASEAN countries ... have AFF products similar to Vietnam but their competitiveness is stronger.

This pressure will not only take place in the export market, but also in the domestic market. For example, vegetables and fruits from countries in the RCEP with good quality, beautiful designs and food safety will not only compete strongly with similar products of Vietnam in the markets of regional countries, but also enter the Vietnamese market.

Therefore, in order to increase the competitiveness of Vietnamese agricultural products in order to take full advantage of the opportunities in the RCEP, we must promote the building of a solid foundation for agriculture. Accordingly, farmers who want to sell products must produce in accordance with the food quality and safety process. Enterprises that want to export must support and link farmers into a stable value chain.