Vietnamese farmers eye multibillion-dollar Chinese market

As Vietnamese agricultural exporters reviewed the figures of 2023, a new trend caught their eyes -- the actual demand from Chinese consumers went beyond their initial projection.

When the export of durian via official channels to China was approved in mid-2022, Vietnamese farmers expected to grab about a quarter of a 4.2-billion-U.S.-dollar market, with an anticipated export value of 1 billion dollars.

But year-end figures of 2023 were astonishing -- Vietnamese durian export to China hit 2.1 billion dollars, capturing 31 percent of a growing durian market in its northern neighbor, according to data released by China's General Administration of Customs.

"China is the leading market in terms of revenues," Nguyen Khac Huy, CEO of one of Vietnam's biggest fresh dragon fruit exporter Hoang Phat Fruit, told local newspaper VnExpress, noting that Japan and South Korea used to be the company's main markets in past years, but in 2023 China surged to the top.

Vina T&T, a major exporter of Vietnamese fruits, also considers China a key market thanks to its 1.4-billion population.

"No other market consumes Vietnamese produce as much as China," said the company's CEO, Nguyen Dinh Tung.

The company's exports to China grew by 70 percent year-on-year in 2023, and China is now its largest market, accounting for 35 percent of its revenues.

It received an order for 1,500 containers from Chinese buyers but could only ship 30 percent of that number due to a supply shortage, according to local media reports.

FRUITS, AND MORE

China imported 44.62 billion yuan (6.19 billion dollars) of Vietnamese agricultural products over the 11 months of 2023, marking a year-on-year increase of 20.3 percent, a report from China's General Administration of Customs said.

According to a report from Vietnam's Ministry of Agriculture and Rural Development, China surpassed the United States in 2023 to become the largest customer of Vietnamese agricultural, forestry, and fisheries products, With a share of 23 percent of Vietnam's total agricultural export value.

China has so far approved 14 kinds of fresh produce, including nine fruits, as official imports from Vietnam. Over 2,900 processed items have also got the green light.

Vietnam's fruit export to China increased 65 percent in market share compared with 2022, Vietnam's official figures showed.

The Chinese market is projected to constitute approximately 80 percent of Vietnam's fruit and vegetable export market share this year.

Vietnam's agricultural export value to China is expected to increase sharply in 2024, as China has agreed to review regulations permitting the export of poultry meat from Vietnam to the market, the Vietnam News reported, citing the Ministry of Agriculture and Rural Development.

Deputy Minister of Agriculture and Rural Development Tran Thanh Nam said China's consumer demand for meat products is up to about 400 billion dollars per year, meaning Vietnamese meat exports to China have a potential many times higher than that of vegetables and fruits.

In 2023, Vietnam's livestock products constituted only a tiny portion of the total agricultural, forestry and fishery export value to China, according to Vietnam's figures.

NATURAL ADVANTAGES

Sharing a border stretching about 1,300 km and crossing seven northern localities of Vietnam, China and Vietnam enjoy unique advantages to promote their trade and economic partnership.

Sharing preferences for agricultural products with the Chinese, numerous Vietnamese farmers have earned a bigger share of the Chinese market than their competitors, thanks to reduced transportation costs made possible by geographic proximity.

Nguyen said Chinese buyers have set up many wholesale markets near the Vietnam-China border to help preserve produce quality.

A bigger picture of bilateral trade shows immense cooperation potential between the two countries. China has been Vietnam's largest trading partner for many years, with their import-export turnover accounting for 25 percent of Vietnam's total import-export value.

The resilience of the bilateral trade ties against global economic headwinds is inspiring. Notably, China was the only market among Vietnam's major export markets to achieve positive growth in 2023, Vietnam's Ministry of Industry and Trade said.

By contrast, Vietnam's agricultural exports to other key markets, such as the United States, experienced negative trends in 2023.

"Vietnam's export of farm produces to China currently accounts for less than 5 percent of China's import, meaning that the room to increase exports remains huge," Deputy Minister of Agriculture and Rural Development Phung Duc Tien said.

To tap the potential, Vietnam must focus on improving the quality of farm produce, meeting requirements and establishing trust, he urged. 

Source: Xinhua