Vietnam’s agricultural products facing barriers to enter Chinese market

Bananas are packaged for export (Photo: VNA)

The MARD’s Agricultural Product Processing and Market Development Department said cassava is the latest export from Vietnam to China to face strict controls on labelling, packaging and information as well as a tightening of import procedures at border gates.

The department said cassava exports to China are expected to be reduced in the second quarter of this year due to lower demand.

Cassava is one of the agricultural products to have seen billions of USD of exports in recent years. But in the first five months of this year, the sector earned revenue of about 414 million USD from shipping 1.08 million tonnes, down 11 percent in value and 17.6 percent in volume year on year, vietnamnet.vn reported.

China continues to be the largest export market for Vietnamese cassava, but the first four months of this year saw exports of the product to the Chinese market fall by 16.4 percent in volume and 3.5 percent in value compared to the same period of 2018.

Previously, the most populous market in the world also strengthened barriers to Vietnamese rice exports.

From the beginning of 2018, China increased import duties on sticky rice from 5 percent to 50 percent and added stricter controls on other rice imports.

Only 20 out of 150 rice export enterprises in Vietnam have received permission to bring their products to China.

Le Thanh Hoa, Deputy Director of the Agricultural Product Processing and Market Development Department, said the new fees and standards have made it hard to sell rice in the traditional export market.

Vietnam exported a total of 2.83 million tonnes of rice in the first five months of this year, earning 1.21 billion USD. These numbers were down 4 percent in volume and 20.7 percent in value year on year.

China dropped to Vietnam's seventh largest rice export market in the first two months of this year, according to the General Department of Customs

Although there are many trade barriers, Hoa still expects Vietnam's high quality rice exports to China to increase after China has announced that 22 Vietnamese enterprises will be permitted to export to this market.

The Ministry of Industry and Trade will also negotiate rice export quotas to the Republic of Korea.

Vietnam expects to increase rice exports to the Indonesian market in the third and fourth quarters. It has also opened talks with the Philippines on contracts to import the product, according to the department.

China has promoted traceable origins and quality management and has asked fruit exporters to register codes showing where  the fruits were planted. The changes have created disadvantages for Vietnamese fruit exporters, especially for those that sell fresh local fruits. For instance, exports of pineapples from Lao Cai and bananas from Lai Chau have slumped severely.

The vegetable and fruit sector promoted exports to highly demanding countries in the first four months of this year including Australia (up 39.9 percent), the Netherlands (up 29.22 percent), the Republic of Korea (up 25.53 percent) and France (up 24.81 percent).

Recently, Vietnamese mangoes have begun to be exported to the US. Mangoes are Vietnam's sixth fruit licensed for export to the US market after dragon fruit, rambutan, longan, lychee and star apple.

The export value of Vietnamese fruits and vegetables in the first five months of 2019 reached 1.83 billion USD, a year-on-year increase of 10.3 percent.

Experts in the sector said the efforts to find alternative markets will help Vietnam's agricultural sector reduce its dependence on the Chinese market and grow despite China's new trade barriers.