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Lao agricultural products yet to penetrate US market
Laos should be able to increase exports of agricultural products to the US due to reductions to the tariff rate authorised under the Laos-US bilateral trade agreement in 2005.
Laos exports a wide range of agricultural products, but few are destined for the US market, according to a recent report from the Ministry of Industry and Commerce.
Exporting agricultural products to the US is challenging because of the many regulations applied by numerous agencies regarding the presentation and form of products, including classifications such as fresh, preserved, or packed for retail consumption.
In 2008, Laos' total exports exceeded US$1 billion. Its major agriculture exports consist mostly of food products, including coffee, locust beans, tea, ginger, preserved fruits, cabbage and cauliflower, sweet potato, dried fruit, banana and maize.
Lao Agro Industry Company in Vientiane province cans vegetables for export to the UK, France, Germany, Poland, Vietnam and Thailand.
The products are canned sweetcorn, pickled garlic and cabbage, rambutan in syrup, baby corn in brine, bamboo shoots, sweetcorn milk, pickled mango and palm seeds.
A senior company official, Mr Chanin Awakulpanich, said yesterday the company has not exported to the US market for 10 years now.
The company once exported pickled mango to the US, “but we faced a high import tariff rate,” Mr Chanin said.
The company currently exports mainly to the EU because of the zero import tariff rates on agriculture products, and has not again attempted to enter the US market.
In 2008, Laos' exports to the US were US$41.9 million, which included US$3.67 million of agricultural goods, nearly all of it coffee and a small quantity of nuts (cashews), the ministry report noted.
Laos' coffee exports to the US in 2008 were significantly less than in 2007.
An official from the Champassak provincial branch of the Dao-Heuang Group, a local coffee exporter, said the group only officially exports to the EU, Japan, Vietnam and Indonesia, and not the US.
“However, our products are also sold in the US through traders and visitors who buy locally in Laos and then return home,” she said.
The US market for agricultural products is quite competitive, with imports of coffee totaling US$3.4 billion and cashews US$633 million in 2008. Both of these goods have a zero tariff, so are unaffected by trade preferences.
According to the US department of agriculture, the US imported more than US$80 billion in agricultural products in 2008. This marked a 12 percent increase on 2007 and a significant increase of 36 percent on 2005, the first year that US agricultural imports exceeded its exports.
vientiane times
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