EVFTA results after five months


After a challenging year in 2020, Vietnam’s pepper exports are forecast to continue to be quiet this year, when many […]

After a challenging year in 2020, Vietnam’s pepper exports are forecast to continue to be quiet this year, when many export markets are still affected by the Covid-19 pandemic. It is also tricky for pepper prices to increase sharply, although the area has decreased significantly.

Five months after the EU-Vietnam Free Trade Agreement (EVFTA) took effect, many agricultural export products increased in volume and value. However, some essential export products of Vietnam have not taken advantage of the EVFTA yet, such as cashew, honey, and sugarcane industries.


EU-Việt Nam Free Trade Agreement

EVFTA brings positive effects to cashew exports of Vietnam

According to Mr. Nguyen Quoc Toan, Director of the Agro Processing and Market Development Authority under the Ministry of Agriculture and Rural Development (MARD), every year, the EU imports agricultural products with a total value of about US$160 billion. Vietnam has many dominant commodities, but some products have not made the most of the advantages from the EVFTA to export to the EU.

For instance, Vietnam is the world’s largest cashew nut exporter but has not yet benefited from exporting processed cashew to the EU market. Despite the advantage of a quota of 20,000 tons, the cane sugar industry has not had any optimistic signals yet. Honey exports to the US are the highest, followed by China and Japan, but honey exports to the EU remain modest. The addition of the EU market will diversify markets and prevent breakages of the supply chain. Moreover, exporters will not be on the back foot, looking for new markets.

Under the EVFTA, deeply-processed products from cashew nuts, with a tax rate of 7-12 percent, will be reduced to zero percent. According to the Vietnam Cashew Association (Vinacas), although Vietnam is the world’s largest nut exporter, processing companies still import about 80 percent of the raw cashew. African countries specializing in exporting raw cashew have also started building processing plants to produce cashew nuts for export.

African countries will increase the prices of raw cashew. The cashew industry of Vietnam is forecasted to be at risk of losing its position as the No.1 cashew nut exporter. At the conference to summarize the cashew industry in 2020, Vinacas emphasized that enterprises must move to the second revolution, which is to build factories to produce processed and seasoned roasted cashew nuts to increase the global value chain.

EU sugar & honey market

In a recent conference of the cane sugar industry, an expert said that despite the EVFTA with a quota of 20,000 tons of sugar, no enterprises had taken advantage of this quota to export. Similarly, Mr. Le Thanh Van, Vice Chairman of the Vietnam Beekeepers Association, said that Vietnam companies had shipped honey to the US, Japan, and the EU since 1991. Of which, honey exports to the US accounted for 80 percent. After the EU has built up strict technical barriers, tight control, and high tax rates, honey exports become extremely limited. With the EVFTA, honey receives tax exemption, but Vietnam has not increased honey exports to the EU market.

With many years of experience exporting sugar to the EU, Mr. Pham Hong Duong, Vice Chairman of Thanh Thanh Cong-Bien Hoa Joint Stock Company, said that the company exports about 30,000 tons of organic and yellow sugar annually. At the same time, products must meet strict standards, including traceability, environment, labor, and genetic modification. To export to the EU, enterprises need to develop these standards soon and head towards deep processing because deep processing will increase the value and profit of products.

According to experts, honey products must meet technical standards to be exported to the EU market, receive international certificates, and establish a local distribution chain in the short term.

Similarly, the cashew industry needs to build raw material growing areas to meet the technical requirements. Mr. Vu Thai Son, Chairman of Long Son Joint Stock Company, shared that Vietnamese enterprises could not export processed cashew nuts to the EU due to high import tariffs. After the EVFTA took effect, the company contacted supermarkets for distribution.

How to maximize the benefits from EVFTA

It was challenging to build a brand in foreign countries, so Vietnamese enterprises could process cashew nuts for supermarkets to develop in the short term. Shortly after putting the products on the shelves of supermarkets and ensuring food safety, supermarkets would immediately actively negotiate with the processing companies, Mr. Vu Thai Son said. By outsourcing to supermarkets, revenues will surge because people fully trust the brands of supermarkets.

To develop the product mentioned in earlier categories with great potential, Mr. Nguyen Quoc Toan suggested that associations need to build cooperation plans with enterprises to connect the distribution and consumption chains from importers and supermarkets to e-commerce channels. Product categories must develop synchronously, instead of sparsely, and change production methods to meet modern technical requirements.

Moreover, it is essential to identify objects and products to meet the technical standards of each market. Associations must coordinate with regulatory agencies to protect products and create export advantages. If Vietnamese companies cannot develop the supermarket chain yet, the MARD can connect with commercial counselors to advertise and introduce products. Regarding management, the MARD needs to implement the codes of growing areas, geographical indications, traceability, quality, and food safety following the EU regulations.

By Thanh Hai – Translated by Thuy Doan

Source: VNE

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Vietnam’s cashew nuts exports increase sharply thanks to EVFTA

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