November 29, 2010

 

Vietnam's agricultural enterprises face unjust China competition

Vietnamese firms are encountering an unfair competition from Chinese traders who have recently rushed to buy agricultural products and materials from Vietnam without any official import commitments, said a local expert.

 

Professor Bui Chi Buu, head of the Institute of Agricultural Science for Southern Vietnam said that Chinese traders are striving to buy almost all major farm produce from Vietnam, including rubber, shrimp, pork, and rice at high prices.

 

"These Chinese traders are not as fair as many others from the US and the EU because they bought Vietnamese farm produce without any contracts on the purchase and investments in boosting agricultural production in the ASEAN country," Buu said.

 

The move has seriously affected Vietnamese processing companies as well as consumers as it caused serious material shortages and price hikes in the domestic market, the professor added.

 

He warned that the problem will become worse if Chinese traders stop buying while Vietnamese farmers start boosting production to export to China.

 

Total quantity of farm produce bought by Chinese traders, however, has not been made available to date.

 

Pham Quang Dieu, director of the Vietnam Market Analysis and Forecasts JSC (AgroMonitor) said that to deal with the problem, Vietnamese authorities should estimate the total quantity of farm produce that Chinese traders have bought from Vietnam.

 

Professor Vo Tong Xuan, former head of An Giang University, said that Chinese traders' purchase is good in case Vietnam ensures the balance of domestic supply and demand.

 

Meanwhile, Vietnamese farmers said they made profits from the purchase of Chinese traders.

 

Nguyen Tri Cong, owner of one of the largest pig breeding farms in Dong Nai province said, pork prices have rebounded since Chinese traders boosted purchase.

 

Earlier, pork prices dropped sharply due to low demand as a result of blue-ear disease, causing huge losses to local breeders, the owner said.

 

Meanwhile, China-originated agricultural products are flooding Vietnam's market with prices are around 10%-20% lower than domestic products.

 

The imported product quality, however, has not been tested by local authorities.