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High logistics costs have been having a great impact on the competitiveness of Vietnamese agricultural products. Photo: NT

The Ministry of Agriculture and Rural Development (the MARD) will coordinate with relevant ministries and branches to establish an interdisciplinary working group to promptly remove difficulties in agricultural product consumption.

Difficulties in China, US, and EU markets

According to data of the General Department of Customs, in the first four months of 2021, the import-export turnover of agriculture, forestry and fishery products between Vietnam and China saw positive changes, reaching more than US$5.5 billion, increasing by 27.8% compared to the same period in 2020.

In which, export turnover reached US$4.023 billion, up by 36.5% compared to the same period in 2020; most of Vietnam's main export products to China increased.

According to the Ministry of Agriculture and Rural Development, the Chinese side is controlling the pandemic well, so the agricultural product market will recover and regain its growth momentum, and China is still a big market for Vietnam's agricultural exports.

Currently, the 4th wave of infections in Vietnam is spreading in localities. The pandemic-affected localities have the same characteristic that there are many arterial roads running through, projecting important freight roads to Hanoi and connecting the provinces with the economic and commercial centers of the North.

In addition, many agricultural products are in the harvest season and China is the main export market such as lychee, longan and dragon fruits, which threatens to put pressure on the circulation to bring agricultural products to border provinces for export to the Chinese market.

From a local perspective, Mr. Bui Van Khang, Vice Chairman of Quang Ninh Provincial People's Committee, said that the Covid-19 pandemic has caused many types of seafood in the province to face difficulties in consumption, especially exports to the Chinese market, sometimes having to depend on small-scale exports.

"The fact is that many seafood products of Quang Ninh are on the list of export to the Chinese market, such as clams and oysters. However, because the Chinese Customs side has not yet provided guidance on monitoring items for official export through Mong Cai border gate in Quang Ninh province, many agricultural products are forced to follow the unofficial export route," Mr. Khang said.

In the European market, the Ministry of Agriculture and Rural Development stated that the Covid-19 pandemic is still complicated, the shortage of containers continues to affect shipping routes from Asia to the US and the EU, while road transport costs too much for the profit margin of agricultural products in general.

Similarly in the US market, Mr. Nguyen Quoc Toan, Director of the Department of Agricultural Product Processing and Market Development, said that in the future, exporting agricultural, forestry and fishery products to the US will face difficulties.

In addition to the shortage of containers, the difficulty is also due to the fact that the freight cost from Asia to the US is still increasing.

Stable in Japan and South Korea

While exports to China, the EU, and the US are forecasted to face certain difficulties, agricultural, forestry and fishery products to Japan and South Korea show signs of stability and improvement.

The leader of the Agricultural Product Processing and Market Development Department said that the export of agricultural products from Vietnam to Japan and South Korea in the first quarter of 2021 grew well with an increase of 5.9% and 7.2% compared to the same period last year, respectively.

Experts predict that Japan and South Korea will control the pandemic in the second quarter of 2021 thanks to an abundant supply of vaccines and more effective management measures by the Governments. Therefore, the export market of agricultural products to Japan and South Korea is forecasted to continue to maintain a stable growth momentum.

To promote the consumption of agricultural products in the context of the Covid-19 pandemic, Mr. Nguyen Quoc Toan said that agricultural product processing factories need to increase processing capacity, focusing on frozen products, concentrated fruit juices and processed canned seafood.

"It is necessary to minimize all procedures in the stages of inspection, granting GAP certificates, organizing production and circulation. The People's Committees of border provinces direct the quarantine stations and customs to strengthen measures to support border trade activities, facilitate customs clearance procedures, and prevent stagnation of goods in border provinces with China,” said Toan.

From the perspective of the Ministry of Industry and Trade, Mr. Phan Van Chinh, Director of the Import-Export Department (Ministry of Industry and Trade) analyzed that recent logistics costs for export are quite high. If enterprises and state management agencies accompany to remove and reduce costs, it will contribute to increasing competition for agricultural products, resonating with the impact of Free Trade Agreements (FTAs).

This is a very important step in removing difficulties to promote export of goods in the context of the Covid-19 pandemic. In addition, localities, associations and industries must also take into account the situation that increased freight charges will form a new price level, even if all efforts cannot return to the previous price level.

Deputy Minister of Agriculture and Rural Development Tran Thanh Nam affirmed that in the future, the Ministry of Agriculture and Rural Development and the Ministry of Industry and Trade will set up an interdisciplinary working group to support localities to solve problems in consumption of agricultural products, especially in border gate areas.

In addition, the Ministry of Agriculture and Rural Development will send a document to the Chinese authorities hoping that the Chinese side will create favorable conditions for customs clearance of agricultural products at border gates, avoiding local stagnation, and at the same time setting up a hotline with China's Nanning province to promptly remove difficulties.