Vietnam has opportunity for exports of agricultural products

In the middle of May, India, the world's second biggest producer of cereal, announced a ban on wheat exports as a part of measures to control rising domestic prices amid concerns of output being hit by a scorching heatwave. The price of wheat has jumped in the international markets resulting in an acceleration of cereal prices because in March, the government of Ukraine, one of the world's top grain exporters, banned the export of wheat, oats, and many staples which are important to the global food supply

Also in March, Russia's Prime Minister on March 14 signed a decree banning the export of white and raw sugar until Aug 31, and banning wheat, rye, barley, and maize exports to neighboring Eurasian Economic Union states. Another thing that has also attracted the attention of many countries is Indonesia's decision to ban all exports of crude palm oil and cooking oil at the end of April. Although this ban lasted only more than three weeks, it also had an impact on countries that buy large palm oil from Indonesia.

The Southeast Asian food and food market continued to waver on May 23, when Malaysia issued a ban on chicken exports as the country faced supply shortages and escalating prices. Malaysia’s ban on chicken export caused concern in Singapore which is heavily dependent on Malaysia's food supply.

According to statistics from global credit rating company Fitch Solutions, after the Russia-Ukraine war broke out, about 30 countries implemented measures to limit food exports. This has disrupted the global food supply chain, causing the prices of many commodities to skyrocket. Fitch Solutions also warned that agricultural protectionism is at its highest level since the 2007-2008 food price crisis.

According to the United Nations, the world food prices have increased by more than 70 percent since mid-2020, and are close to reaching a record level after Russia launched a special military operation in Ukraine, blocking export bottlenecks of many essential commodities and supply chain disturbances. From May 18 to 23, the UN held 3 meetings on global food security, warning of the risk of food insecurity by real numbers. On May 23, the UN General Assembly adopted a resolution on ‘Global Food Insecurity’ without a vote.

In the above context, Vietnam, with many advantages in agriculture, is being assessed as playing an important role in supplying food to the world. Ambassador Dang Hoang Giang, Head of Vietnam's Permanent Delegation to the UN, affirmed by applying innovative and sustainable agricultural models, Vietnam hopes to become an innovative hub for food in the region. With that in mind, Vietnam will continue to make meaningful contributions to joint efforts to address global food security challenges.

Rice is one of the commodities that are assessed to have many opportunities to accelerate exports in the near future. Mr. Pham Thai Binh, General Director of Trung An High-tech Agriculture Company, said that rice cannot replace wheat immediately, but in the current context, Vietnam will have a huge opportunity for rice export as it is among the top ten rice exporters. From now until the end of the year and through 2023, the demand for rice will increase in many countries around the world. Vietnamese rice is definitely competing with rice from other exporting powers such as Thailand.

According to data from the Ministry of Agriculture and Rural Development, rice exports in the first four months of the year reached about 2.05 million tons, bringing in a total export value of over US$1 billion, up 4.4 percent in volume. Vietnam's rice price remains higher than that of some traditional rice exporting countries such as India, Pakistan, and Myanmar. In May, Vietnam's rice exports to some key markets still maintained a good growth momentum. Specifically, in the early days of June, the price of rice for export continued to increase by $10-$15 a ton compared to May.

Along with rice, seafood is also a commodity that businesses are promoting to supply to the world market. According to the Vietnam Association of Seafood Exporters and Producers (VASEP), seafood exports cooled down in May, but its revenue still reached $1 billion. 

Moreover, the turnover of seafood exports has maintained high for three consecutive months at $1 billion and over $1 billion, bringing the total export turnover of the sector in the first five months of the year to $4.6 billion, up 42 percent over the same period last year. Facing many fluctuations in food in some regions of the world, Vietnamese seafood has the opportunity to thrive again.

Pangasius market expert from VASEP Ta Ha said that inflation in Europe is reaching a record high, threatening to weaken the production recovery process of economies. after the Covid-19 pandemic. It is forecast that food prices in Europe will increase to unprecedented levels, this is an opportunity for pangasius businesses to return to this market after many years of stagnation. 

Moreover, the EU and US sanctions on Russian pollock - which is a strong competitor to pangasius - also significantly reduced the supply of white fish in this region. This is a good opportunity for Vietnamese pangasius enterprises to promote frozen pangasius exports to the EU.