Global economy affects Vietnam

Nguyen Do Anh Tuan, head of the Institute of Policy and Strategy for Agriculture and Rural Development, said the latest change in the world economy was the economic slowdown in China. China's economy is large so the slowdown will have a major impact on the world economy, including Vietnam.

20% of Vietnam's farming products had been exported to China, he said.

According to statistics, China is a large export market for different kinds of local farming products, including rice, which accounts for 36.7% of total national rice export value; rubber with 47%; and fruits and vegetables with 36.2%; in addition to fertilisers which account for 55%.

Meanwhile, national farming, forestry and fishery products have reduced their competitive ability in prices against other rivals on the world market because some countries have devalued their currencies. These countries are China, Brazil, and India, in addition to Indonesia, Malaysia and Thailand, according to Tuan.

Workers process cucumbers for export in G.O.C Food Processing JSC in Tan Xuyen Industrial Park, Bac Giang Province. —VNA/VNS Photo Vu Sinh

The devaluation of those currencies has reduced the prices of goods and services, including prices of Indian and Thai rice, Brazilian and Colombian coffee, along with Thai, Indian and Indonesian shrimp, and Indonesian and Malaysian rubber.

Nguyen Trung Kien, acting head of the institute's Market and Goods Research Department, said Viet Nam had gained strongly in trading agricultural products over 25 years of economic reforms. But, the growth began to drop from 2011 up to now and it had depended mainly on export of farming products.

Key farming products also saw a sharp drop in exports recently, including a decrease of 14% in the value of coffee exports and 16% in seafood exports.

However, Nguyen Huu Dung, deputy chairman of Vietnam Association of Seafood Exporters and Producers (VASEP), said the reduction in export of local seafood products was not mainly due to the Chinese market because Vietnamese seafood exported to China accounted for 7% of the total national seafood exports.

Other kinds of farming products such as cashew and pepper have also not had high export volume to China.

Dung said the local export enterprises should have new and strong products to create breakthroughs in exports. These enterprises should create advantages in competitiveness for export products.

Kien said local firms should promote farming exports including seafood, coffee, and pepper, along with cashew, wood and wooden products to the US as a rise in US dollar will help Vietnam's export value increase.

For rice, the local firms should seek export contracts in Indonesia, the Philippines and Malaysia because those countries were forecast to receive reduced supply of rice this year, he said.

For the long-term, the State should support local firms to diversify the rice export markets to Africa, Europe and other Asian countries.