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Exporters could lose $175 mln due to border pile-up

By Minh Tu, Thi Ha   December 23, 2021 | 10:56 pm PT
Exporters could lose $175 mln due to border pile-up
Thousands of containers are seen at the border gate between Vietnam and China in Lang Son Province in December 2021. Photo by VnExpress/Ngoc Thanh
Exporters could lose VND3-4 trillion ($131-175 million) if 6,200 container trucks remain stuck at the Vietnam-China border, an association estimates.

A truck typically carries goods worth VND500-900 million, and costs of renting the truck and hiring a driver could increase by VND100 million plus other expenses, chairman of Vietnam Fruit Association Dang Phuc Nguyen told VnExpress.

This means losses could hit VND3-4 trillion if fruit including dragon fruit, jackfruit, watermelons and mangoes grow rotten due to delays, he said.

As of Dec. 21, there are 6,200 container trucks stuck at the border with China, among which 4,400 are in Lang Son Province, according to Vietnam Customs.

Exporters are stuck between a rock and a hard place: they cannot cross the border to sell in China, but returning to sell domestically would likely result in a major loss.

"Dragon fruit prices in Hanoi are around VND4,000 per kilogram, or a quarter of export prices. This will make us suffer heavy losses, not to mention other expenses," said Tran Ngoc Hiep, CEO of dragon fruit exporter Thanh Long Hoang Hau.

Hang, a trader in the Mekong Delta region, estimates her loss to be in the VND billions (VND1 billion = $43,625) this year.

Jackfruit are best preserved within 20 days on a truck, she said, adding some of her trucks have been delayed for 25 days and the goods cannot be exported.

The "zero Covid" policy of China has made Vietnamese agriculture exporters suffer, she added.

China has been tightening safety checks on imports in recent weeks as the country seeks to prevent contagion from Vietnam where an average of 15,900 new Covid-19 cases were reported each day in the last week.

It has closed some of its border gates with Vietnam, making two of three gates in Lang Son the main routes plied by Vietnamese exporters, resulting in a pile-up of container trucks.

Although border blockages have occurred for years, insiders say this is the most severe occasion.

This means exporters like Hanh in the central highlands of Kon Tum won’t likely be able to sell over one hectare of watermelons to Chinese buyers, who had come and approved the quality of her farm a few days ago.

"Because of the pile-up, buyers have canceled their plan to put down a deposit."

The Private Sector Development Committee has called for the government to conduct a high-level meeting to untie the border knots.

It added that in the long term, provinces that border China need to invest more in logistics and increase warehouse and parking space to speed up border crossing for container trucks.

The pile-up also affected electronics delivery. Some of the biggest electronics manufacturers in Vietnam stated that because of the blockage, they cannot import parts from China by road and had to ship them on aircraft with costs 76 percent higher.

China is one of Vietnam's top trading partners. The import-export turnover of agro-forestry-fishery products between the two countries had grown strongly from $8 billion in 2015 to $11 billion last year.

China was Vietnam's second-largest export market for agricultural, forestry and fishery products behind the U.S., posting an export turnover of $8.4 billion in the first 11 months of the year, accounting for 19.2 percent of Vietnam’s total agricultural exports.

 
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