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The US boosts farm produce export to Vietnam
In the first quarter of 2010, Vietnam, for the first time in five years, imported more farm produce form the US than it exported. This can be explained by the fact the country is expanding its efforts to boost food exports. “The US now begins reaping fruits after many years of trying to promote farm produce export to Vietnam,” analysts say.
The US boosting farm produce exports
According to the General Department of Customs, in the first four months of the year, Vietnam imported up to $768 million worth of animal feed, an increase of 81.7 percent in comparison with the same period of 2009. By the end of April 2010, the US has surpassed India and Argentina to become the biggest supplier of animal feed to Vietnam.
Ta Trung Linh, Director of Thanh Binh Company, which specializes in making animal feed in Dong Nai province, said that as US companies try to boost their exports, they are offering sale prices which are ‘softer’ than previous years.
Soybean residue, for example, which sold at 1000 dong per kilogramme last year, has fallen to 800 dong per kilogramme. Meanwhile, wheat imported from the US has dropped to just 4700 dong per kilogramme.
Since the materials needed for making animal feed imported from the US are cheaper by 20-30 percent compared with the same materials in the domestic market, Vietnamese enterprises now prefer importing materials from the US instead of using domestic products.
“Several years ago, our company only imported 30 percent of materials, but now we import 80 percent of materials needed to make animal feed,” Linh said.
The Director of a company specializing in importing cereals and fruits in HCM City also said that the US has begun boosting its exports to Asian countries. He said that for the last several years, his company had been exporting soybean from Argentina. However, US products are now more favoured thanks to more stable quality and lower prices.
According to analysts, the fact that the US has been expanding exports to Asian countries, including Vietnam, means the US has kicked off an economic ‘war’ with the countries which have been exporting farm produce to Vietnam, such as China, India and Indonesia.
The timber import revenue from the US also increased sharply in the first quarter of 2010. According to Le Tri Thang, General Director of Duc Loi Company, a large wooden furniture exporter in Binh Duong province, his company now has to import 30 percent of its timber materials from the US market, a 10 percent increase over the same period of last year. Businessmen said the import price from the US market is lower by 5-10 percent than from other countries’, because US exporters are trying to clear their large stocks of timber, explaining why Vietnam’s timber import revenue increased by up to 107 percent in the first quarter of 2010.
Time for the US to reap fruits
For the last 10 years, US enterprises have been quietly promoting farm produce exports to Vietnam, with maximum support from the authorities and trade associations. It seems it is now the right time for the US to reap the fruits of its export labors in Vietnam after many years of growing plants.
Analysts said that in the Vietnam-US two-way trade, a farm produce trade deficit will occur, sooner or later. But because the US exports produce to Vietnam which Vietnam does not generate, or which Vietnam grows, but not in enough volume to meet consumer demand, this deficit has finally occurred.
Nguyen Van Sanh, the owner of a shop that sells animal feed in Binh Duong province, said that for the last few years, he has been selling animal feed and aquaculture feed with US brands.
“The US products have good quality. Meanwhile, every year, the sale agents like me and the farmers who use US products can go to the US to learn breeding experience,” Sanh said, explaining why he prioritises distributing produce from the US.
According to the US Department of Agriculture, in the first three months of the year, US enterprises exported $417 million worth of farm produce to Vietnam, an increase of 79.6 percent compared with the same period of the last year. Meanwhile, Vietnam’s farm produce export revenue to the US market increased by just 10.58 percent, to $339.3 million.
vietnamnet, TBKTSG
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