Food exports beginning to recover

"We have gotten orders worth tens of millions of dollars so far this year," Le Thi Giau, chairwoman of instant noodle exporter Binh Tay Food, said at a trade promotion forum earlier this month in HCMC.

Minh Phu Seafood reported a 30% increase year-on-year in processed seafood exports in the first quarter, having received more orders from the U.S. and EU after a two-year slump in demand.

It hopes to boost revenues by 50% this year.

Ly Kim Chi, chairwoman of the HCMC Food and Foodstuff Association, said exports of food products have increased by over 30% this year.

Businesses have received enough orders to maintain steady production though volumes remain lower than in previous years, and need to expand to new markets and get more customers, she said.

Vietnam’s seafood exports were worth nearly US$2 billion in the first quarter, up 8% year-on-year, according to the Vietnam Association of Seafood Exporters and Producers.

The figure is set to grow in the coming months as businesses get more orders, the association said.

Chi said though exports have improved, firms are not making much profits due to high costs.

"We have to keep prices steady to achieve sales, but both local and imported inputs have become more expensive, eating away at profits."

Vietnam’s export competitiveness has taken a hit due to high transportation costs caused by geopolitical conflicts, she added.

Maritime research consultancy Drewry’s World Container Index, which provides a weekly assessment of container freight rates on 11 major trade routes, was at $2,795 per 40-foot container last week, up 64% year-on-year.

In the long term food exporters would also face challenges in complying with increasingly strict sustainability regulations in large markets like Europe, experts said.

The regulations require businesses to meet standards regarding energy and water consumption, greenhouse gas emissions and other environmental and social indicators.

Nguyen Thi Thanh Phuong, environmental services manager at food testing laboratory Eurofins Sac Ky Hai Dang, said meeting these requirements helps businesses access foreign capital and expand into new markets.