Updated  
December, 30 2011 10:14:25

Farm exports face tough year

 

A farmer in the central province of Quang Tri harvests coffee beans. Agricultural exports will face difficulties next year due to the ongoing global economic downturn. — VNA/VNS Photo Ho Cau
HCM CITY — Agricultural exports will face a lot of difficulties next year due to the ongoing global financial crisis and economic downturn, experts say.

Local enterprises should enhance market research, estimate demand and understand clearly their import partners to help them be steady during the difficult time, said Nguyen Quang Binh, director of Chanh Tinh Anh Viet Nam Coffee Co Ltd.

He spoke at a conference jointly organised by the Viet Nam Supply Chain Insight magazine and the Viet Nam Coffee and Cocoa Association in HCM City yesterday.

The difficulties and challenges in the global financial and commodity markets might be bigger and much more difficult to predict next year and this could badly affect the local economy, Binh said.

In the domestic market, some agricultural industries, especially coffee, pepper and cashew, would continue to face financial difficulties next year as the Government would continue with measures to control inflation and cut public investment, he said.

Farm produce prices next year might not be as high as this year, he said, noting that: "When both buyers and sellers are in need of money, the circulation of farm produce will be no longer happen freely and naturally."

In the wake of the economic downturn, importing countries would increase the imposition of barriers to limit imports and strengthen checks on food hygiene and safety, he said.

"I heard that it is possible the EU will regulate market shares and divide exports of some countries to its markets; some Vietnamese items therefore may be pushed out of the list of items that receive preferential treatment when they are exported to the EU," he said.

The market would also set new regulations on label and product quality. Businesses should therefore study carefully the regulations set by importing countries to ensure stable exports, Binh said.

To avoid or minimise risks in the current situation, import and export companies should not expand their portfolio and stretch their management capacity. Instead, they should "shrink their performance, just do what is within their control and can be comfortably managed", he said.

He advised businesses to use trading tools carefully for exchange rate and commodity hedging to prevent severe losses.

Each industry should conduct research on supply and demand in each market during different periods so that credible information was available and the local farm produce market was not affected by rumours, leading to hoarding and selling at the same time, he said.

Tran Luong Thanh Tung, managing director of CFE Commodity Exchange JSC, said most of the country's farm produce was exported as raw material without branding, making for low export values.

Furthermore, local enterprises mainly took part in the low value chain, while the high value chain was outside the country, he said.

He said local businesses should improve their production technologies to add more value for their export items and export at CIF (Cost, Insurance and Freight) prices.

Pham Ngoc Duong, editor-in-chief of the Viet Nam Supply Chain Insight magazine, said despite difficulties in the world economy this year, Viet Nam had enjoyed good earnings from exports of farm produce. The export of cashew, rubber, rice, coffee and other products had increased, he said.

Cashew export revenues, for instance, topped US$1.3 billion, up $150 million over last year.

Viet Nam played an important role in the world food security today, he said. — VNS

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