Bad weather conditions and a strong competition from other exporters have hampered the usually fast growth of Vietnam's agricultural sector, officials said.
The sector expanded only 2.08 percent in the first nine month, with the annual growth expected to inching up to 2.21 percent, according to the agriculture ministry. That would be the lowest since 2011.
Exports from the sector in October dropped 6,94 percent from a year ago to $2.55 billion. In the first 10 months, exports fell 6.1 percent to $11.5 billion. Staples such as coffee, rice, tea and seafood saw sharp declines of between 8.4 to 31.4 percent.
The ministry estimated that the sector’s export revenues this year will hit $30 billion, down 2.8 percent from last year. Such a decline would be a sharp contrast from a 11.2 percent increase last year.
Nguyen Thi Hong, head of the ministry’s Planning Department, said the industry is facing difficulties from both natural and market factors.
The worst El Nino year in two decades has brought record heat and drought across the country and severely affected crop and seafood farming activities.
Hong said the bigger challenge is that Vietnam has had to compete against new rice exporters such as Myanmar and Cambodia.
Fish and shrimp farmers have also scaled down their business due to low prices.
Hong said demand from traditional buyers of Vietnam’s agriculture products such as the US, Japan and Europe has dropped along with higher quality and safety requirements.
She said Vietnamese agriculture products become less competitive also because several Asian countries devalued their currencies following China. “That has made Vietnamese exports more expensive.”
Contribution of the sector to the country’s GDP during the first half of this year was a mere 2.16 percent, compared to more than 18 percent last year.