Breaking agricultural export hurdles thanks to long-term strategy

Vietnam-China agricultural trade is expanding

According to Mr. Truong Dien Sinh, Chairman of Hang Sinh International Investment Group (China) and Deputy General Director of Chan Hung Sinh Loi Agricultural Investment Group Joint Stock Company (HCMC), agro trade between China and Vietnam has made significant progress in recent years.

China consumed up to fifty percent of Vietnamese vegetable exports between 1991 and 2000. Vietnam and China's overall trade volume climbed 3,895 times between 1990 and 2019, from USD 30 million in 1990 to USD 11.8 billion in 2019. Despite the effects of Covid-19, the trade volume between Vietnam and China will reach USD 117.09 billion in 2020.

Vietnam's exports of vegetables to China reached USD 74.9 million in 2020, up from USD 2.48 billion in 2019.  Vietnam's overall export and import turnover of agricultural goods to China in the first nine months of 2020 declined by 8.6 percent compared to the same time in 2019 owing to the effect of the Covid-19 pandemic but still exceeded USD 9.9 billion.

The aforementioned numbers demonstrate the immense potential for agricultural commerce between the two nations. Vietnam is the sixteenth biggest exporter of agricultural products in the world and the second largest among ASEAN nations (2019 statistics); more than 70 percent of Vietnamese vegetables and fruits are exported to China.

In recent years, agricultural products have become more diverse and more strictly regulated. Vietnamese agricultural goods exported to China must rigorously adhere to the market's criteria and regulations. Goods exported via formal channels are subject to stringent pesticide residue inspections, product traceability is necessary, and food safety and hygiene are prioritized.

"There have been several stringent criteria and standards from China and Vietnam, necessitating careful selection to ensure product quality and origin transparency. Recent import and production of agricultural goods are required to have traceability, which is an essential necessity for both nations. Agricultural items are now traded via legitimate channels as opposed to unauthorized ones.

This shift necessitates that enterprises in the two nations pay close attention to the business process, notably in terms of product quality. On the other hand, Vietnam and China are encouraging and providing possibilities to boost the growth of bilateral e-commerce, using technology to trade cooperation between the two nations in light of the changing conditions "Mr. Sinh noted. 

Adapting to hardship

Vietnam's agricultural exporting firms and farmers require a long-term plan to adapt in the face of more stringent technical obstacles in agricultural export markets, notably from a major exporter like China.

Mr. Phan Thanh But, chairman of Sinh Loi Group, said that the discovery of significant pesticide residues in Vietnamese fruits and vegetables supplied to the European Union is a wake-up call for both fruit and vegetable exporters and Vietnamese farmers.

He highlighted that the Sinh Loi Group has increased its agricultural material regions, particularly in the provinces of Binh Dinh, South Central, and Central Highlands. It is anticipated to establish ties with agricultural cooperatives in the area. During the production process, agricultural cooperatives will be responsible for assisting and instructing farmers in cultivation according to correct procedures, hence preventing errors in product exports.

"If farmers are let to plant at whim, they would inevitably misuse pesticides, which must be prevented if the goods are to be shipped easily via official channels. Therefore, Sinh Loi Group and Hoai An Thanh Nien Agricultural Cooperative (Binh Dinh) inked a cooperation agreement to develop the fruit material region in this district. Sinh Loi Group has a long-term plan of creating its own raw material area to control product quality in the present market environment; nonetheless, challenges are unavoidable in challenging markets "said Mr. Phan Thanh But.

"In July of this year, the Hoai An district will work with the Binh Dinh Crop Production and Plant Protection Sub-Department to establish planting area codes for major fruits like Vietnam green-skinned pomelo, Thai jackfruit, and sugar tangerine. This is a requirement of Sinh Loi Group before purchasing Hoi An fruit goods. The whole district of Hoai An boasts more than 3,120 hectares of fruit trees, including green-skinned pomelo, Siamese coconut, waxed avocado, Thai jackfruit, tangerine, etc. Mr. Vo Duy Tin, head of the Hoai An district's Department of Agriculture and Rural Development, said that approximately 1,590 hectares of land in 10 communes had been designated as specialist fruit-growing regions.