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Vietnam’s exports of farm and seafood products and impact of Corona virus 

 Saturday, February 15,2020

AsemconnectVietnam - Vietnam’s authorities and businesses are making efforts to promote domestic consumption of agricultural products, which are piling up due to the impact of novel Corona virus outbreaks in China.

The country’s export turnover is forecast to decrease in the first quarter of this year due to the epidemic and subsequent impact on trade.
The exports are estimated to fall by 21 per cent to 46.5 billion USD in the first quarter of this year, according to the General Statistics Office (GSO).
Several items including agricultural products, seafood, wood products and garment and textile products are likely to be the worst hit.
The country’s exports to China are predicted to reach 5.6 billion USD, declining by 25 per cent year – on - year, with agricultural and wood products affected.

The impact of novel corona virus outbreaks on agricultural sector
Insiders said that the agricultural sector is estimated to be most damaged by the epidemic from China, including dragon fruit, watermelon, seafood, wood and rice. However, it’s also an opportunity to change production and business methods to adapt to new challenges and difficulties, including those caused by the spreading of new strain of corona virus (Covid-19).

Vietnam’s Minister of Agriculture and Rural Development Nguyen Xuan Cuong said it’s necessary to develop both short - and long - term scenarios as well as large-scale production and co-operation chains to find other directions for agricultural outputs.

The impact of novel corona virus outbreaks on forestry sector
According to Mr. Nguyen Ton Quyen, former vice president and general secretary of the Vietnam Association of Wood and Forest Products, the shipments of woodchips to China have dropped due to the virus. However, there is a chance for local businesses to develop production of artificial boards and medium-density fiberboard made of woodchips.
Mr. Quyen also proposed the State to consider supporting such businesses with interest rates and helping them complete production lines to take advantage of the opportunity.

Exports of seafood and the impact of novel corona virus
According to the Deputy General Secretary of the Vietnam Association of Seafood Exporters and Producers Nguyen Hoai Nam, the industry has not seen any cancellation of orders due to corona virus, but there were several delays or order adjustments. The difficulty of the aquatic sector now is that some cruises have temporarily stopped receiving containers of goods to China.
“Enterprises exporting to China are currently stockpiling, suffering high costs for warehouses. In China, there are many firms directly selling Vietnamese seafood to restaurants, however when the restaurant system stops buying or reduces the volume of seafood purchases, these firms are forced to stop importing seafood from Vietnam because they do not want to pay the cost of storing goods,” Nam said.
“I see a number of opportunities here. Firstly, the demand for frozen and canned products will increase because many people do not want to eat fresh products during the outbreak. Secondly, China is one the biggest five sellers of tuna in the world. Many countries will cut or reduce the import of Chinese tuna, so it’s time for Vietnamese firms to expand the export of tuna, increasing market share,” he added.

Vietnam’s aquatic product exports decline in January due to the impact of the novel corona virus epidemic
Vietnam’s total aquatic product export value in January fell by 12.5 percent year-on-year to 644 million USD due to the impacts of the novel corona virus epidemic, according to the Vietnam Association and Seafood Exporters and Producers (VASEP).
Vietnam’s total aquatic product export value in January fell by 12.5 percent year-on-year to 644 million USD due to the impacts of the novel corona virus epidemic, according to the Vietnam Association and Seafood Exporters and Producers (VASEP).

The epidemic is greatly impacting China, one of Vietnam's main aquatic product export markets, and causing a strong reduction in exports from Vietnam to China.
VASEP Deputy General Secretary Nguyen Hoai Nam said several enterprises exporting tra fish (pangasius), tuna and shrimp had faced suspension of payment for export contracts because Chinese banks were not open due to the coronavirus epidemic. It was expected that from February 16 when banks are set to reopen, Chinese partners would be able to pay Vietnamese export contracts for goods shipped by sea.

In addition, some large shipping firms had not agreed to ship goods to China while some large seafood importers had proposed ships not go past ports in China.
VASEP has predicted that aquatic product exporters will still be able to receive new contracts but the number of contracts will decrease. Chinese restaurants reducing aquatic product consumption will affect Vietnam's aquatic product exports.
Some local exporters have had aquatic products sent to China that have had to be stockpiled, racking up large fees to freeze the seafood in stock, according to Nam.

However, VASEP General Secretary Truong Dinh Hoe said the epidemic was likely to not have a great impact on Vietnam’s aquatic product exports this year because usually, demand for imported aquatic products from Vietnam to China increases in March and April, reported Dau tu (Investment) newspaper.
China is one of Vietnam's four largest aquatic product export markets, accounting for 16-17 percent of the country’s total aquatic product export value.

On the other hand, Hoe said VASEP saw many opportunities for local businesses to increase the production of frozen and canned seafood because during and after the epidemic, customers would favor processed seafood.
Mr. Hoe also said that large global events like the Tokyo 2020 Olympics and Euro 2020 football tournament would boost seafood consumption, especially of shrimp. The scale of the outbreak in China would cause many markets to reduce seafood imports from China.

Vietnam’s seafood enterprises could take those opportunities to increase exports to the US, Japan, South Korea and Europe, Hoe said.
In addition, businesses should also focus on increasing their market shares domestically, said the VASEP representative.
Duong Nghia Quoc, Chairman of the Vietnam Pangasius Association, said besides export strategies to key markets, businesses needed to enhance marketing activities and expand distribution channels at home.
CK
Source: VITIC/Vietnamplus.vn

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