Vietnam’s agricultural sector expects to surpass 2011’s export target of $23 billion since agricultural, forest items and seafood exports exceeded $10 billion in the year’s first five months.
According to a Ministry of Agriculture and Rural Development (MARD) report, the agricultural export values leaped 41.5 per cent in the first five months of 2011 against the same period last year.
Key export items saw robust growth in pivotal export markets. For instance, seafood exports rose 27.3 per cent in value reaching $2.1 billion, coffee up 43.8 per cent in volume and 130 per cent in value coming to $1.8 billion, coffee up 26.3 per cent in volume and more than double in value.
Despite an export volume decline, the export value of pepper and cashews surged 59 and 21 per cent respectively on-year in the first five months of 2011.
According to industry insiders, Vietnam is almost likely to surpass its whole-year export value target since the price hike tendency was forecast to linger until the year’s end alongside steady world market demands.
Particularly, seafood export is expected to hit $5.8-6 billion in 2011, up $0.8-$1 billion over 2010’s figure thanks to soaring export prices. Similarly, coffee export values may climb to record $3 billion this year as the coffee export price currently hits a 34 year record.
Despite a sharp growth in the export value, the agricultural sector’s profit margins remain low and the growth is not yet sustainable chiefly because Vietnam mainly exports raw materials which have a low added value and are heavily dependent on imported material sources.
“Though export orders until the year end are multiple, businesses’ greatest concern now is the increasingly scarce world material sources,” said Vietnam Timber and Forest Product Association general secretary Nguyen Ton Quyen.
Similarly, high lending rates and difficulties in accessing loans placed cashews businesses in competitive disadvantages of losing contracts to the hands of foreign rivals.
MARD’s Agro-Forestry-Fishery Product Processing and Salty Industry Department deputy head Doan Xuan Hoa attributed the agricultural sector’s poor profit figures to low rates of processed items as in fact 90 per cent of Vietnam’s export agricultural products are in the form of preliminary processing with lower export prices (5-10 per cent lower) compared to similar items from regional countries.