Rice, fruits bright spot amid Vietnam export slump

While exports of textiles, wood products and seafood plummeted in the first five months of 2023, those of rice and fruits have risen.

Overall exports between January and May were worth US$136.17 billion, down 11.6% year-on-year, according to the General Statistics Office.

Seafood, wooden furniture, handicrafts, and textile exports fell by double digits. Many businesses ran out of orders.

Fruits, rice and a few other staple products were bright spots, however. Fruit and vegetable exports grew by 29% to $1.9 billion, mainly due to increased Chinese imports, according to the Vietnam Fruit Association.

Among the top fruit and vegetable markets, strongest growth was seen in exports to China, the U.S., the Netherlands, and Malaysia. China alone accounted for $805 million worth of products.

Exports of processed foods such as instant and rice noodles and spices grew by 10-30%. Nguyen Anh Tuan, deputy general director of Colusa – Miliket Food Joint Stock Company, said exports, which went to 30 countries and territories, were 30% higher year-on-year.

Shipments to key export markets such as the U.S., Japan and South Korea increased sharply, he added.

Every year Lotus Rice exports several thousand tons of the grain to the EU market, but this year it is not “able to buy enough quality rice to sell,” its director Huynh Van Khoe said.

“There has never been a year when we’ve seen this many rice export orders. Even though the price of rice has increased, our partners still want to buy large quantities.”

China’s reopening has been of great benefit, Nguyen Dinh Tung, general director of Vina T&T Import and Export Company, said.

In the first four months of the year his company’s fruit exports grew by 20%, he said. It has a contract to ship 1,500 containers (of 15 tons each) of durian to China, he added.

Dang Phuc Nguyen, general secretary of the Vietnam Fruit and Vegetable Association, said Vietnamese fruits are becoming popular because of their taste.

Vietnamese durian, mango and dragon fruit are better priced and have higher quality than their competition from China and India, he said.

Vietnam also has a favorable climate and better farming techniques than other countries, and grows fruits all year round unlike in other countries, where they are seasonal, he said.

In the latter half of this year fruit and vegetable exports could spike if businesses meet the demands of the Chinese market using good agricultural practices, he said. “Fruit and vegetable exports this year could top $4 billion.”

The export boom is driven by several factors. China’s reopening has led to a rise in demand for food staples, the war between Russia and Ukraine has forced countries to create food reserves and drought has caused a decrease in global food supply.

Markets such as Europe, the U.S. and the UK have increased food imports for their reserves.

A report by the U.S. Department of Agriculture said global output in the 2022-23 rice crop is expected to reduce by 2% from last year to 503 million tons, the first annual decline since 2015-16.

Yet businesses warned that the big picture for exports during the rest of 2023 is not very bright. The global economy is still in recession, inflation remains high and the risks of rising raw material prices still lurks.