Exporters bank on EU trade pact for pandemic relief

Trung An Hi-Tech Farming Jsc in the Mekong Delta city of Can Tho exported its first batch of Vietnamese rice to the E.U. last month with zero tariffs under the EU-Vietnam Free Trade Agreement (EVFTA) that took effect August 1.

It shipped 150 tonnes out of a total 3,000 tonnes that will be delivered to Germany and France this year.

Buyers paid $1,000 for a ton of the company’s ST20 rice grown in the southern province of Soc Trang. This is the highest price ever recorded for Vietnamese rice.

Another exporter, Thoai Son Food in the southern province of An Giang, plans to export 126 tonnes of Jasmine 85 rice to the E.U. by the end of this month.

At least six other companies have registered to export 4,300 tonnes of rice to the E.U. this month, according to the Ministry of Industry and Trade.

The rising number of orders from the E.U. follows the EVFTA giving Vietnam a tariff-free rice export quota of 80,000 tonnes a year.

Other types of agriculture produce also enjoy reduced or zero duties under the pact.

Several exporters this month have announced or shipped their first batch of coffee, passion fruit, coconut, green grapefruit and dragon fruit to the E.U.

One of them, the Vina T&T Group in Ho Chi Minh City, plans to export 20,000 coconuts, 12 tonnes of grapefruit and three tonnes of dragon fruit to the bloc soon.

Rising orders

Its CEO Nguyen Dinh Tung said the company will export about 20 tonnes of fruits weekly to the E.U. from now on. He said that since the trade pact was implemented, there has been an increase in the number of orders from this market.

The trade pact has helped lower the prices of Vietnamese fruit, making them more competitive than those from Thailand, Indonesia, China and Malaysia, he added.

Seafood exporters are also reaping benefits of the new trade agreement. Shrimp exports to the E.U. rose nearly 16 percent year-on-year in August to $58.8 million after duties on the giant tiger prawn were eliminated, according to the Vietnam Association of Seafood Exporters and Producers (VASEP). Earlier the duties stood at 4.2 percent.

Nguyen Van Kich, CEO of Cafatex Fishery Jsc in the Mekong Delta province of Hau Giang, said since the trade pact took effect, many buyers have started to place orders again after months without any major activities due to Covid-19 impacts.

He added Vietnamese shrimp quality is higher than that of India, Thailand and China, and therefore the zero tariff will give exporters a major advantage.

"The EVFTA could urge European buyers to replace shrimp from Thailand, India and China with that from Vietnam. We expect increasing number of customers."

VASEP said rising exports of shrimp to the E.U. will contribute to a total shrimp export growth of 8 percent this year to $3.6 billion.

The recent increase in exports to the E.U. bloc has been a fillip to Vietnamese agriculture and seafood producers who were hurting from travel restrictions and dwindling global demand as a result of the pandemic.

Exports to the E.U. in the first eight months fell 8.9 percent year-on-year to $29 billion, with declining value in smartphones, textile and garment and agriculture produce, according to Vietnam Customs.