Opportunities to export agricultural products to European market

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Mangoes have a great opportunity to export to the EU market if they meet quality standards. Photo: An exhibition area to introduce Vietnamese mangoes at an international fair for technology of producing and processing vegetables, flowers and fruits (HortEx Vietnam) in Ho Chi Minh City. Photo: Phan Anh

The EU-Vietnam Free Trade Agreement (EVFTA) signed in 2019 is considered a great opportunity for Vietnam's agricultural exports due to the deeply reduced tax rate from the first years, in which, many agricultural products will be reduced to 0% in tax.

Big market

The EU is one of the potential markets for agricultural exports with 508 million people. According to forecasts of the Ministry of Industry and Trade, The EU-Vietnam Free Trade Agreement will help Vietnam's export turnover to the EU increase by about 20% by 2020; 42.7% by 2025 and 44.37% by 2030. Agricultural products with great export potential are fruits and vegetables.

Mr. Le Thanh Hoa, Deputy Director of Agricultural Product Processing and Market Development Department (Ministry of Agriculture and Rural Development) said that the EU is a big market with high import demand of fruits and vegetables, especially vegetable spices. Currently, processed fruits and vegetables are exported quite well by businesses in this market.

Mr. Willem Schoustra, Agricultural Counsellor Vietnam & Thailand, the Embassy of the Netherlands in Vietnam shared, the EU market in general and the Netherlands in particular have great demand for fresh tropical and processed fruits. This is a good opportunity for Vietnamese agricultural products to its overcome weakness of not being able to establish clean production chain yet. Dutch businesses want to invest in Vietnam in the field of agriculture, especially in establishing a safe agricultural chain, in which the Mekong Delta is quite similar to the Netherlands in terms of population and the number of provinces and great potential for agricultural development.

Quality of agricultural products is required to improved

However, in order for fresh fruits and vegetables to be exported to the EU, Vietnam businesses must ensure strict quality and food safety requirements, especially the residue levels of pesticides. The EU is willing to pay a higher price than other markets to import quality agricultural products, but the difficulty is that the market is increasingly demanding; the frequency of supervision and inspection is also higher in terms of quality standards, if not, we will lose opportunities in this potential market.

Mr. Tran Quang Tinh, Director of Viet Farm Trading Co., Ltd. (Xuan Truong commune, Xuan Loc district) commented that in order for Vietnamese agricultural products to enter the finicky market, farmers have to change from production with high export standard of safety and quality. Accordingly, Viet Farm has invested in growing vegetables and fruits in a membrane house with modern technology with GlobalGAP certificate. Currently, the company is working with many partners, and it is expected that in 2020, many vegetable and fruit products of the farm will be exported to the EU finicky market.

Commenting on overcoming restrictions to promote the export of agricultural products to the EU, Mr. Bui Xuan Hoang, General Director of Hoan Vu Science and Technology Co., Ltd (Tan Phu District, Ho Chi Minh City) said that in addition to quality, the weak preservation stage is the biggest barrier for exporting fresh fruits to the EU. Mr. Hoang compared that currently, 90% of Vietnam's dragon fruit production is not of high quality, only about 10% is qualified for export to the EU and other fastidious markets. On the other hand, the price of 1kg of dragon fruit in retail in the EU market is currently up to USD 12 due to weak preservation stage, the rate of fresh fruit is greatly damaged, the time to display dragon fruits on retail shelves to customers' hands is limited to few days. According to Mr. Hoang: "If the preservation is good, European consumers of dragon fruit will not only maintain under 10% as currently but would increase many times."

                                                                                                                                                Phan Anh