VietNamNet Bridge - Vietnam’s agricultural sector expects to surpass 2011’s export target of $23 billion since agricultural, forest items and seacooking exports exceeded $10 billion in the year’s first five months.

According to a Ministry of Agriculture and Rural Development (MARD) report, the agricultural export values leaped 41.5 per cent in the first five months of 2011 against the same period last year.

Key export items saw robust growth in pivotal export markets. For instance, seafood exports rose 27.3 per cent in value reaching $2.1 billion, coffee up 43.8 per cent in volume and 130 per cent in value coming to $1.8 billion, coffee up 26.3 per cent in volume and more than double in value.

Despite an export volume decline, the export value of pepper and cashews surged 59 and 21 per cent respectively on-year in the first five months of 2011.

According to industry insiders, Vietnam is almost likely to surpass its whole-year export value target since the price hike tendency was forecast to linger until the year’s end alongside steady world market demands.

Particularly, seafood export is expected to hit $5.8-6 billion in 2011, up $0.8-$1 billion over 2010’s figure thanks to soaring export prices. Similarly, coffee export values may climb to record $3 billion this year as the coffee export price currently hits a 34 year record.

Despite a sharp growth in the export value, the agricultural sector’s profit margins remain low and the growth is not yet sustainable chiefly because Vietnam mainly exports raw materials which have a low added value and are heavily dependent on imported material sources.

“Though export orders until the year end are multiple, businesses’ greatest concern now is the increasingly scarce world material sources,” said Vietnam Timber and Forest Product Association general secretary Nguyen Ton Quyen.

Similarly, high lending rates and difficulties in accessing loans placed cashews businesses in competitive disadvantages of losing contracts to the hands of foreign rivals.

MARD’s Agro-Forestry-Fishery Product Processing and Salty Industry Department deputy head Doan Xuan Hoa attributed the agricultural sector’s poor profit figures to low rates of processed items as in fact 90 per cent of Vietnam’s export agricultural products are in the form of preliminary processing with lower export prices (5-10 per cent lower) compared to similar items from regional countries.

Agricultural sector aims to boost added value

The agricultural sector plans to raise the added value of its products by at least 20 per cent in the next decade.

The target is set as the volume and value of exports of Vietnamese farm produce increase constantly in the recent years, but farmers’ income did not increase in correlation.

Additionally, 90 per cent of the country’s exports are raw farm produce and exports with prices 5-10 per cent lower than those of similar produce of other countries.

According to Bui Chi Buu, director of the Southern Agricultural Science and Technology Institute, processed products earn values some 10-fold higher than raw products. For example, one kilo of packed processed tra or basa (pangasius) fillets is sold for over $10, while the same raw fish quantity is valued at only $1.

The export of pepper is another example, with turnover registering big surge while the volume remained almost unchanged thanks to a three-time increase in the amount of processed pepper for export.

He added that the country could earn an additional $100 million from coffee exports if its products were of better quality. In fact, Vietnam ships abroad between 900,000-1 million tonnes of coffee a year, earning about $1.8 billion-$2 billion.

The sector has focused investment on its processing industry and improving production methods to raise the quality of farm produce, considering those as urgent tasks in the future.

The project to raise the added value of agricultural products includes a series of measures to improve technology, including increasing mechanisation in the Mekong Delta, the major region for key farm produce, to 60 per cent and building the system of post harvest and warehouse to reduce losses of rice to 5-6 per cent.

In 2011, the sector plans to complete the planning of safe tea, vegetable and fruit areas in cities and provinces nationwide with a half of production establishments in these areas and 30 per cent of their products meeting the Certification for Vietnam Good Agricultural Practice (VietGAP).

Joining those efforts, the Ministry of Industry and Trade approved a plan to develop an industry to manufacture agricultural, forestry and fisheries equipment with a total investment capital of over VND20 trillion ($1 billion).

Source: VNA/VIR