Export earnings from Vietnamese farm commodities have fallen after many countries let their currencies depreciate significantly, giving their exporters more ability to undercut rivals.
Arabica coffee beans sit in a container inside coffee store in Hanoi. Photo: Bloomberg
Vietnam's farm exports dropped 7.7 percent year-on-year to around US$9.2 billion in the January-August period, and experts warn that further declines should be expected.
They made the gloomy forecast at a conference held by the Institute of Policy and Strategy for Agriculture and Rural Development on Wednesday in Hanoi, news website Saigon Times Online reported.
Nguyen Do Anh Tuan, chief of the institute, better known as Ipsard, said since China, which buys 20 percent of Vietnam's agricultural exports, depreciated the yuan last month, Vietnamese exporters have been under pressure to reduce their prices to be able to compete with Chinese products.
Some other major competitors such as Brazil, India and Thailand have also let their currencies declined, he said.
Over the past year, the Brazilian real has fallen 72 percent against the US dollar and the Thai baht, 18 percent, he said.
Nguyen Trung Kien, a researcher with Ipsard, was quoted as saying that in 2013, Vietnamese rice accounted for 66 percent of China's rice imports. But the ratio fell to 47 percent in the first four months this year, after China sourced more rice from Thailand and Cambodia.
Sales of robusta coffee beans could also shrink, now that arabica beans produced by Brazil and Columbia, which are preferred by roasters, have become almost just as cheap.
Vietnam's seafood products are too facing difficulties, considering that its shrimp is now more expensive than similar products from India, Indonesia and Thailand, Kien said.
Ipsard researchers urged local exporters to boost shipments to the US, as the US dollar has remained strong, especially for products that "have advantages" in that market such as seafood, coffee, pepper, cashew, and wood, the news website reported.
For a mid- and long-term solution, the government should help local businesses diversify their markets, for instance by exporting rice to Ghana and the US, and coffee to Australia and South Korea, Kien said.