China is importing less cassava from Vietnam, causing difficulties for local producers. (Photo: vietnambiz.vn)Hanoi (VNS/VNA) – Vietnam will continue toface difficulties in exporting cassava this year, especially to China, thelargest export market of local cassava, according to the Vietnam CassavaAssociation.
China has strict regulations on packaging labels and information on Vietnamesecassava starch imported via border gates to Guangxi province, the associationsaid.
China has dumped corn into stock used for animal feed and the industrialsector, making corn prices in China more competitive with imported cassava.
In addition, demand for imported cassava from Vietnam via border gates hasdropped because of a rise in contracts to import the product from Thailand.
The exchange rate between the yuan and Vietnamese dong decreased becausethe yuan continued to depreciate against the US dollar, which was adisadvantage for export transactions through the border gates.
China is the largest consumer of Vietnamese cassava, accounting for 90 percentof exports, so it has affected local businesses and farmers, according to theassociation.
According to the Ministry of Industry and Trade (MoIT)’s Export and ImportDepartment, in the first half of January, the price of raw cassava in Tay Ninhand Kon Tum provinces decreased slightly due to weak demand and over supply ofcassava.
The purchasing price of cassava at processing factories dropped by 100,000 VND pertonne to 2.7-3 million VND (116-128 USD) against the end ofDecember 2018 in Tay Ninh province and to 2.6-2.8 million VND in Kon Tum province.
Nguyen Thang Manh from the Vietnam Cassava Associationsaid that now, cassava inventories at processing factories are high while theyare out of capital to continue production.
“If this situation lasts for a month, many factories will go bankrupt, havinggreat consequences on businesses and farmers as well as the economy,” Manhsaid.
Most factories have also not invested in developingmaterial areas and mainly bought the material from farmers, leading to fiercecompetition in purchasing raw materials. This has reduced competition ofprocessed products for export, according to the association.
Development of processing factories is not synchronised with the development ofmaterial regions, according to the association.
Those difficulties pushed the industry out of the list of goods achieving atleast 1 billion USD in export value last year.
According to the Ministry of Agriculture and Rural Development (MARD), in 2018,the industry exported 2.4 million tonnes of cassava, earning 958.7 million USD.Those figures were a reduction of 38 percent in volume and 7.1 percent in valueyear on year.
Therefore, the Ministry of Industry and Trade and the MARD are working withChinese partners to facilitate Vietnamese cassava starch production and tradingenterprises in export to the Chinese market.
According to the association, 50 percent of 120 existing factories, notincluding household-scale factories, meet China’s food hygiene and safetystandards. This is important because in the future, this market would promotetraceability and food safety requirements.
Therefore, the association said the industry needs to encourage household-scalefactories to implement food hygiene and safety standards to meet requirementsat home and abroad.
Nguyen Quoc Toan, Director of the MARD’s Department of Farm Product Processingand Market Development, said Chinese consumers prefer Vietnamese agriculturalproducts but if the local products are not improved soon they would facedifficulties entering this market. In promoting further international economicintegration, the products must ensure they meet quality standards to beexported to foreign markets.
Toan said that farmers and businesses must change their production andmanagement methods as well as strengthen processing of added-value products.
At the same time, the State and businesses should boost trade promotionactivities to expand export markets, avoiding dependence on China market. Thetraders should shift from trading small volumes at border gates to doingbusiness under contracts with large export volumes.
The association said it needs cooperation from the Department of Farm ProductProcessing and Market Development and the MoIT’s Trade Promotion Agency topromote exports to other markets.
In addition, the MARD and localities should coordinate with the association tomanage plans on synchronous development of processing factories and rawmaterial regions, avoiding overlaps.
The MARD has also proposed the Governmentreduce value-added tax from 10 percent to 5 percent for cassava because cassavaproduction is mainly located in remote areas.-VNS/VNA
China has strict regulations on packaging labels and information on Vietnamesecassava starch imported via border gates to Guangxi province, the associationsaid.
China has dumped corn into stock used for animal feed and the industrialsector, making corn prices in China more competitive with imported cassava.
In addition, demand for imported cassava from Vietnam via border gates hasdropped because of a rise in contracts to import the product from Thailand.
The exchange rate between the yuan and Vietnamese dong decreased becausethe yuan continued to depreciate against the US dollar, which was adisadvantage for export transactions through the border gates.
China is the largest consumer of Vietnamese cassava, accounting for 90 percentof exports, so it has affected local businesses and farmers, according to theassociation.
According to the Ministry of Industry and Trade (MoIT)’s Export and ImportDepartment, in the first half of January, the price of raw cassava in Tay Ninhand Kon Tum provinces decreased slightly due to weak demand and over supply ofcassava.
The purchasing price of cassava at processing factories dropped by 100,000 VND pertonne to 2.7-3 million VND (116-128 USD) against the end ofDecember 2018 in Tay Ninh province and to 2.6-2.8 million VND in Kon Tum province.
Nguyen Thang Manh from the Vietnam Cassava Associationsaid that now, cassava inventories at processing factories are high while theyare out of capital to continue production.
“If this situation lasts for a month, many factories will go bankrupt, havinggreat consequences on businesses and farmers as well as the economy,” Manhsaid.
Most factories have also not invested in developingmaterial areas and mainly bought the material from farmers, leading to fiercecompetition in purchasing raw materials. This has reduced competition ofprocessed products for export, according to the association.
Development of processing factories is not synchronised with the development ofmaterial regions, according to the association.
Those difficulties pushed the industry out of the list of goods achieving atleast 1 billion USD in export value last year.
According to the Ministry of Agriculture and Rural Development (MARD), in 2018,the industry exported 2.4 million tonnes of cassava, earning 958.7 million USD.Those figures were a reduction of 38 percent in volume and 7.1 percent in valueyear on year.
Therefore, the Ministry of Industry and Trade and the MARD are working withChinese partners to facilitate Vietnamese cassava starch production and tradingenterprises in export to the Chinese market.
According to the association, 50 percent of 120 existing factories, notincluding household-scale factories, meet China’s food hygiene and safetystandards. This is important because in the future, this market would promotetraceability and food safety requirements.
Therefore, the association said the industry needs to encourage household-scalefactories to implement food hygiene and safety standards to meet requirementsat home and abroad.
Nguyen Quoc Toan, Director of the MARD’s Department of Farm Product Processingand Market Development, said Chinese consumers prefer Vietnamese agriculturalproducts but if the local products are not improved soon they would facedifficulties entering this market. In promoting further international economicintegration, the products must ensure they meet quality standards to beexported to foreign markets.
Toan said that farmers and businesses must change their production andmanagement methods as well as strengthen processing of added-value products.
At the same time, the State and businesses should boost trade promotionactivities to expand export markets, avoiding dependence on China market. Thetraders should shift from trading small volumes at border gates to doingbusiness under contracts with large export volumes.
The association said it needs cooperation from the Department of Farm ProductProcessing and Market Development and the MoIT’s Trade Promotion Agency topromote exports to other markets.
In addition, the MARD and localities should coordinate with the association tomanage plans on synchronous development of processing factories and rawmaterial regions, avoiding overlaps.
The MARD has also proposed the Governmentreduce value-added tax from 10 percent to 5 percent for cassava because cassavaproduction is mainly located in remote areas.-VNS/VNA
VNA
