Food businesses face many challenges

	Removing the "golden ring" of food security for the Mekong Delta
	Seafood businesses looking forward to restarting traditional trade promotion activities
	Seafood businesses are worried about all kinds of rising costs

The food industry has recovered well thanks to increased domestic and foreign market demand. Photo: N.H

Positive recovery

Speaking at a press conference introducing the Ho Chi Minh City (HCM City) International Food Industry Exhibition 2022 (HCMC Foodex 2022) on September 22, Mr Tran Phu Lu, Deputy Director of Ho Chi Minh City Investment and Trade Promotion Center (ITPC), said the food processing industry is one of the four key industries prioritized for development of Ho Chi Minh City, accounting for 13.78% of production value and contributing 13.69% of the city's industrial sector's added value. The HCM City food processing industry has gradually shifted to in-depth development and developed many quality products that dominate the domestic market, replace imported goods and are exported to many countries in the world.

To help the food industry maintain its development and its role as a key production industry in the face of the heavy impacts of the Covid-19 pandemic, the HCM City's People's Committee has issued a Program to support the development of businesses and products in the field of the food processing industry in Ho Chi Minh City for the 2020-2030 period with many solutions. As a result, the production and business activities of the industry have had a positive recovery.

Ly Kim Chi, Chairman of the Ho Chi Minh City Food and Food Stuff Association, said that the industrial production index of the food industry in HCM City in the first eight months of 2022 grew by 26.87%, 9% higher than the national growth rate. The food processing industry alone rose by 11.9% thanks to the growth of some key industries, such as the processing and preserving of meat and meat products rose; processing and preserving of aquatic products and aquatic products, and the production of pasta, noodles, and similar products rose by 15.4%, 11% and 25% respectively.

Along with that, thanks to the recovery of domestic consumption demand, retail sales of the food industry in Ho Chi Minh City recorded a growth of 12%. As a result, the consumption index rose by 7.82%, and beverage consumption rose by 52.5%.

Import-export activities have also maintained a good growth rate, with the country's total export turnover of agricultural, forestry and fishery products in eight months reaching US$36.3 billion, up 13%. In particular, many products recorded high export value, such as coffee, rubber, rice, pepper, milk and dairy products, meat and meat by-products, pangasius, and shrimp.

Ms Chi assessed this as a positive result for the food industry and Vietnam's economy in the current context.

Many challenges ahead

Despite the positive recovery, the new normal state is also creating great challenges, requiring food businesses to improve to meet domestic and foreign market demand. Accordingly, solid international integration will increase major events such as wars, epidemics, and financial crises, which will have a stronger impact on Vietnam.

Ms. Ly Kim Chi said that the high cost of production materials and logistics fees are the two main issues that significantly impact the receipt of new export orders of enterprises. Accordingly, the prices of domestically produced and imported raw materials and accessories have increased by 15-40% after the pandemic; other imported materials for processing or packaging have also increased by more than 30%.

Meanwhile, Vietnam's advantageous products face competition from countries like India and Thailand. This requires businesses to reform, change technology, implement digital transformation and traceability, improve labour productivity and product value and bring local culture to products to adapt to the requirements of export markets.

Ms Ly Kim Chi is also concerned about the strict technical barriers imposed by countries, especially on agricultural and aquatic products and processed foods. This is inevitable when Vietnam has not gained the initiative in exports in terms of markets, products and production technology.

However, the coordination to update and provide warning information about changes in regulations on commodity standards, control measures, and trade remedies applied to Vietnam's exports has not been effective, making businesses passive and confused in response and easily fall into the situation of being sued or unable to export goods.

In addition, climate change is also a significant concern because Vietnam is one of four countries that are assessed to be significantly affected by climate change, including the Mekong Delta, which is the home of rice, seafood products and key fruits of Vietnam. This will be a challenge for the development of the agricultural industry as well as input materials sources for the food industry