Agriculture exports to China could take $800 million hit

Phan Van Chinh, director of the Foreign Trade Agency under the Ministry of Industry and Trade (MoIT), said at a meeting Friday that if the nCoV epidemic was contained within three months, damage to agriculture exports to China would be $400-600 million, and if it lasted longer, the figure could climb to $600-800 million.

MoIT Minister Tran Tuan Anh said the nCoV is likely to inflict great damage on trade with China, the largest buyer of Vietnamese agricultural produce last year, and both short-term and long-term solutions were needed to address this problem.

The Ministry of Planning and Investment had estimated earlier that if the outbreak was contained in Q1, Vietnam’s Q1 export value could fall by over 20 percent year-on-year, with exports to China falling 25 percent.

But if it prolongs to Q2, exports to China could fall by as much as 56 percent, it said.

Dragon fruits and watermelons were obvious early victims of the nCoV outbreak, with hundreds of container trucks stuck at border gates for over 10 days after the Lunar New Year (Tet) holiday as custom authorities blocked trading to limit the risk and spread of the nCoV.

The container truck owners/drivers found some relief after Prime Minister Nguyen Xuan Phuc ordered the resumption of border trade to ensure economic activities are not overly restricted by the virus.

However, officials and traders are still concerned that other fruits like lychee and mango would face the same challenges if China continues to limit trade activities.

Vu Ba Phu, director of the Trade Promotion Agency, said that Vietnam must find new markets soon for these fruits immediately.

He said more market research was needed to find the best market for each fruit. While Vietnam has been exporting large quantities of dragon fruits to South Korea, surveys show that consumers there prefer Vietnamese grapefruit, he noted.

Officials have said that the E.U. and other countries with which Vietnam has signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) have the potential to become replacement markets.

China was Vietnam’s third biggest export market last year with a value of $41.4 billion, up 0.1 percent year-on-year, in which agriculture, forestry and seafood experts amounted to $7 billion, according to Vietnam Customs.