Exporters fear coronavirus will cause more pain

Do Ha Nam, deputy chairman of the Vietnam Food Association, said export prospects look gloomy with demand for rice now decreasing after a surge in the last few months when the pandemic was spreading rapidly globally.

The Philippine government recently scrapped plans to import up to 300,000 tons of rice from Myanmar, India, Thailand, and Vietnam because it was "no longer necessary under the current situation."

This shows demand for rice is now dwindling, Nam said.

He was concerned his company would not be able to find new markets for rice exports as there are signs of a resurgence in coronavirus cases globally.

Tedros Adhanom Ghebreyesus, director-general of the World Health Organization, on June 29 said the pandemic is accelerating around the world as many countries that reopened their economies have seen a resurgence in Covid-19 cases.

The U.S., South Korea, China, Italy, and Germany have all reported new local infections despite imposing lockdowns.

Experts expect exports to the E.U. to rise thanks to the EU-Vietnam Free Trade Agreement (EVFTA) taking effect in August.

But rice producers said they have yet to meet the bloc’s quality standards and so are unlikely to export to it this year.

Truong Dinh Hoe, general secretary of the Vietnam Association of Seafood Exporters and Producers, said if there is a second wave of coronavirus cases globally, demand would slow in the E.U., stymieing Vietnamese businesses’ plans to boost exports in the second half.

Vietnam’s trade shrank by 2.1 percent year-on-year in the first six months to $238.4 billion, the first decline since 2009.

Exports fell 1.1 percent to $121.2 billion, with smartphones, textiles and garments, footwear, seafood, and fruit exports all decreasing.

The chief of a footwear company, who asked not to be identified, said products are always created with exports in mind and therefore would not have much demand domestically.

But his company has no choice except to reduce its share of revenues from exports from 80 percent to 60 percent and increase local sales, he said.

Officials have said the pandemic is also an opportunity for businesses to restructure their supply chains and invest more in technology to increase value addition.

Minister of Agriculture and Rural Development Nguyen Xuan Cuong said at a recent forum that Vietnamese companies need to focus on growing organic products with traceable origins to meet European standards.