PM urges better logistics for fruit, vegetable exports

Tuesday, 2017-12-19 09:50:57
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PM Nguyen Xuan Phuc speaks at the forum. (Credit: VGP)
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NDO/VNA – Prime Minister Nguyen Xuan Phuc has asked the Mekong Delta region to improve logistics to increase fruit and vegetable exports to global markets.

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Phuc spoke at a forum titled “Market Development for Fruit and Vegetables, and Solutions for the Development of Logistics Systems for Agriculture and Rural Areas” held in the Mekong Delta province of Dong Thap on December 18.

The PM urged the region to continue to keep up with new trends in the global market and take advantage of the fourth industrial revolution and apply advanced technologies in farming to produce the best quality fruit and vegetables. “Logistic plays a key role in enhancing competitiveness and promoting the global market for Vietnamese vegetables and fruits,” he said.

Bui Quoc Nghia, head of the Vietnam Logistics Institute, said the high cost of logistics was one of the barriers reducing the competitiveness of Vietnamese agricultural products in the world market.

Specifically, the ratio of logistic costs to Gross Domestic Product (GDP) in Vietnam is 20.8%, compared to 15.4% in China, 10.7% in Thailand, 13.5% in Asia Pacific, 9.2% in Europe, and 8.6% in North America. The average ratio of logistics costs to GDP globally is 11.7%.

However, the Vietnamese logistics industry has great growth potential, according to the report Vietnam Logistics Market 2017, Nghia said.

Rapid economic growth as well as significant trade with a total value of US$350 billion last year is expected to boost growth of the transport sector. However, major hurdles facing the industry include underdeveloped infrastructure and an overloaded road network, he added.

Nguyen Xuan Cuong, Minister of Agriculture and Rural Development, said the potential for fruit and vegetable exports was huge.

Exports of fruits and vegetables are expected to continue to grow. The sector should develop associations for investing in hi-tech agriculture. Businesses should work with farmer collectives to establish concentrated raw material areas, he added.

The minister said the growth of the agricultural sector would largely depend on export value and changes in the market.

It is essential for businesses and farmers to build production chains of safe fruits and vegetables and use hi-tech agriculture in order to reach the export target of US$3 billion by the end of this year, he said.

The forum saw the signing ceremony of the Memorandum of Understanding (MoU) on the development of logistics and infrastructure development in Dong Thap province.

The signing was done between the province, the Institute of Organic Agricultural Economics, and a venture of the Investors of Vietnam Infrastructure Development and Real Estate Corporation (VIPD), the Sunny World Property Development Corporation, and the Saigon Gia Dinh Real Estate Joint Stock Company.

Under the MoU, the venture will finance research and development for a logistics and infrastructure development strategy in Dong Thap province. The venture will promote investment in infrastructure development and urban and logistics projects.

In addition, the provincial People’s Committee, Institute of Organic Agriculture Economics, Lavifood Corporation and Greenland Business Group signed an agreement to promote the export of agricultural products from Vietnam to China via an official channel for the first time with a value of at least US$500 million in the first two years and a gradual increase in coming years.

The forum, organised by the Institute of Organic Agricultural Economics and the Dong Thap provincial People’s Committee, was held to promote exports of Vietnamese fruits and vegetables as well as investment in the value chain of fruits and vegetables.

Vietnam is expected to earn US$3.5 billion from shipping vegetables and fruits this year, representing a year-on-year growth of 45%, according to the Ministry of Agriculture and Rural Development.

In 2017, China, Japan, the US, and the Republic of Korea were the four largest importers of Vietnamese fruits and vegetables, importing US$2.15 billion, US$102 million, US$82 million and US$73 million, respectively.

After attending the forum, Prime Minister Nguyen Xuan Phuc visited Thuan Tan Club in Tan Thuan Tay commune, Cao Lanh city, Dong Thap province – a venue for Mekong Delta residents to share agricultural production experience.