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Farm produce exports still cannot find new markets   2009-03-12 - VietNamNet

The difficulties in exporting products to old markets have forced Vietnamese exporters to look for new markets. However, the efforts have not yet brought satisfactory results.


Failing to find new markets, Vegetexco, an exporter of fruits and vegetables, has decided to return to old markets, including Russia, Eastern Europe, Western Europe, the Middle East and Egypt.


The loyal importers have been cutting orders continuously. They have even canceled signed contracts since the Russian ruble has been depreciating with a value of 40% lost so far.


Thanh Hoa Vegetable and Fruit Import-Export Company has also been trying to seek new markets in the last two months. However, the number of new contracts it has found proves to amount to nothing. The company has just begun contracts to export several hundred tons of products to Malaysia and Taiwan, though the company has offered to sell products at very low prices.


The company is now having to shut down 10 workshops, while keeping the other three at moderate production levels, and still has up to 6,000 tons of material left.


As for seafood exports, Seaprodex said that it has to shift to Asian markets after the old market in the EU has been narrowed. However, the corporation has not received any new contracts. As fewer contracts have come, many of the corporation’s seafood processing workshops in Ca Mau, Bac Lieu and Tra Vinh provinces have had to scale down production, now running at only 30-45% of capacity, in order to ensure minimum wages for laborers.


Meanwhile, the exports to new markets prove to be unsatisfactory. Tra fish exports to Romania, for example, have very low prices. The prices of exports to the market have dropped from Euro2.12/kg at the end of 2008 to Euro1.24 right now. The prices are expected to drop further in the time to come as a result of the local currency devaluation.


The Ministry of Agriculture and Rural Development (MARD) said that in 2009, farm produce exporters will target new markets including the Middle East, Eastern Europe (Russia and Ukraine), North Africa, South America and China. However, it is not easy to penetrate the market because of stiff competition and a lack of money.


While Vietnam is still busy seeking solutions to litchi consumption, China has made a big leap already as it has been successful in growing litchis with no pit.


MARD has reported that in the first two months of the year, the export turnover of farm, forestry produce and seafood was only $2.02 billion, down by 3.2% over the same period of the last year.


Do Thang Hai, Director of the Vietnam Trade Promotion Agency Vietrade under the Ministry of Industry and Trade, said that Vietnamese businesses need to be very patient to conquer new markets. He said that businesses should not think that new markets can be reached within one or two months.


Hai said that Vietnamese enterprises, which have the advantages of providing products at low prices, should take full advantage to expand their market shares in big markets, like the US, EU and Japan.


The markets previously imported high-grade products. However, as their people have tightened their purse strings in the global economic recession, they will shift to importing products with lower quality.


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