拉字至上第六季

Export
Vietnam a ‘perfect partner’ to help bridge beef and grain trade gap
James Nason, December 14, 2020

Pedestrians cross the 150 metre long Golden Bridge near Da Nang in Vietnam.

A report points to ‘significant opportunities’ for Australian exporters to expand trade ties with Vietnam, including for beef and grain, as soaring tensions with nearby China encourage diversification toward other markets.

The report, titled “A path to Vietnam”, was prepared by the Asia Society and RMIT University and analyses opportunities and barriers for greater Australian trade with Vietnam in future.

It identifies Vietnam as a “standout option” for Australian businesses to consider as markets for a range goods, describing the South East Asian nation as a “a perfect economic partner for Australia”, as both nations have complimentary economic systems and seek diversification of their trading partnerships, amidst weakening global economy and geopolitical tensions.

Vietnam, with a population of 96 million people, has had uninterrupted economic growth since 1989, generally welcomes Australian business and Brand Australia is well regarded in the country, the report notes.

The Governments of both countries have set an ambitious joint target to become each others’ top ten trading partners and to double two-way investment.

“Vietnam’s rapid growth over three decades, consistent economic reform, swift digital uptake and competent COVID-19 management have put the country in good shape,” the report states.

In 2019, two-way trade between the two countries reached nearly $15.5 billion according to the Department of Foreign Affairs and Trade.

The report suggests significant opportunities to increase trade exist for beef, live cattle, wheat, barley and cotton, along with horticulture and processed foods.

Vietnam is Australia’s second largest market for live cattle, taking 32 percent of all exported Australian cattle in 2019-20.

Vietnam has imported 277,000 Australian cattle in the 11 months from January to November 2020, surpassing the 267,663 shipped in the entire 2019 calendar year. The most cattle Australia has exported to Vietnam in a single year was 360,000 head  in 2015.

Sales of beef increased by 290 percent over the five years to 2019 according to the report. MLA’s most recent South East Market snapshot shows that boxed beef exports to Vietnam in 2019-20 totalled 5,237 tonnes, which was down on the five-year average of 6,683 tonnes.

However the report suggests significant potential exists for Australia to grow exports of key products including beef to Vietnam, based on consumption trends in the market, Australia’s comparative advantage as a supplier and FTA and other market access advantages.

Supporting this was an increasingly modern agribusiness and processed food sector in Vietnam, and the potential for Australian business to introduce inputs, expertise, knowledge, or processes that facilitate efficiency.

The Export Potential Map, a major data source hosted by the International Trade Centre (ITC – a joint agency of the WTO and United Nations) identifies Australia’s export products that have the greatest growth opportunities in the Vietnamese market.

Examples of Australian firms operating in the agricultural sector included  SunRice and Australia’s largest grain-exporting company CBH, which first invested in Vietnam in 2005 to underwrite grain exports by launching a joint venture (Interflour) with Indonesian food conglomerate, Salim Group in grain-processing plants. Interflour can choose to purchase grain from around the world and sources 60-70pc of its wheat from Australia. In 2017, the company also opened a US$70 million malting plant in Cai Mep, near HCMC, to supply Vietnam’s drinks industry and directly connect Western Australia’s barley growers to the fastestgrowing beer market in Asia.

In 2008, a group of Australian investors purchased VN Futuremilk Co. Ltd which operates a 1,500- cow dairy located in Son Duong, Tuyen Quang Province, about 100km northeast of Ha Noi. The new company was modernised adopting leading technology and practices and is a prime dairy producer in the region.

Market access benefits

The report notes that Australia’s exports benefit from Vietnam’s membership of both AANZFTA and CPTPP. Australian exporters receive at least equivalent access to Vietnam as key competitors for -beef and live cattle, wheat and barley, cotton, horticulture products, semi-processed metals, and processed foods.

Australia also has FTA market access advantages over key competitors in beef, wheat and selected horticultural products.

“Vietnam’s agricultural sector is relatively open, with relatively low levels of government support and protection for agriculture when compared with other ASEAN and OECD economies,” it says.

Additional Vietnam had in place very few harmful trade policies.

“Even during 2020 – when many economies rushed through protectionist measures to shield local sectors from the global economic slowdown – Viet Nam has not disadvantaged overseas agricultural suppliers.”

It notes that operating in a foreign market requires an awareness of local challenges, regulatory hurdles, cultural differences and ways to address them, and that “Vietnam is no different”.

“But these can be navigated with the right approach and resources”

The report said that Australia and Vietnam both seek to reduce their economic over-reliance on China as a dominant trading partner and were both committed to supporting the continuing presence and engagement of the US in the region as a balancing factor to an increasingly assertive China.

To download the full report click here

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Comments

  1. Johnny Preston, December 16, 2020

    Am sooo happy to hear that. Unrelated but attached.
    The South China should be renamed as it should of been at the start.
    South ( of ) China is the name it was meant to be.
    Meaning it’s the. sea south of China.
    Could change some rhetoric of China claiming it’s theirs.
    Adding of can justify its international waters ONLY.
    I am happy this was here for me to comment.
    BE GOOD IF YOU COULD GET EVERYBODY WHO MENTIONS THIS SEA AS THE SOUTH OF CHINA SEA.

    TAKES AWAY OWNERSHIP WITH THE CURRENT NAME
    HOPE SOMEONE READS THIS.
    YOU CAN GET THIS OUT.
    Johnny Preston

  2. Trevor Powis, December 15, 2020

    Australia, Viet Nam should create a great partnership in a lot of trade and social events.
    These people are doing so well.
    Going from strength to strength with their economy. ‘Doi Moi’ got ‘the people’ going, thanks to the excellent direction the government took-late 80’s.
    Australia have welcomed the Vietnamese since 1975 and have not regreted it just thrived on it.
    Lets move forward NOW.
    Personally, I can’t wait to visit this marvelous country (people) again. Hopefully mid 2021 after COVID.

    Trev Powis Cohuna Victoria Australia

  3. Lex mcwhirter, December 15, 2020

    I fully support all efforts to build interests in Vietnam vibrant switched on people that you could work with get rid of China their self interested and hard to deal with and only interested on coming out on top trade doesn’t work like that
    Regards lex

  4. 拉字至上第六季
    Glen Feist, December 14, 2020

    I agree there are significant opportunities for greater export to Vietnam being a “perfect partner” to help bridge the beef and grain gap especially during the ongoing trade impasse with China that seems to be taking forever to resolve. Let’s not kid ourselves though countries like China do not import products because they are trying to help out the economy of a particular country. They import because they need products or services. They import because they don’t have the particular product that is in demand readily available in-country. Yes they can always survive for a period as stocks run down and they look to other suppliers but in general, they buy from Australia because we are competitive and offer a good and serviceable product, be it barley, coal, or beef. This means they will come back because of the reasons they bought from us in the first place. In the meantime, however, we should be reminded of a not so distant past when Vietnam and Hong Kong were the biggest and best “grey trade” routes into China. I was working in Hong Kong and part of my brief was to oversee the cold stores and ice plants of the Company. On any given day we would supply 1,000’s of tonnes of ice to the huge Chinese fishing fleets. Along with this ice was 1’000’s tonnes of frozen Australian boxed beef. Other channels from Hong Kong saw 1,000’s of containers of Fruit or other products China needed. Vietnam was no different. AMLC/MLA would produce hugely distorted import numbers of these countries in volumes that they could never consume. It was because it was all going through into China. These grey channels all but closed when China started to open up and abide by WTO agreements but I can assure you that while there is a need and there are smart and ingenious businessmen they will find a way to service those needs. At the end of the day, it is just another tough period of doing business in an ever competing world. The best thing that can happen to Australia is that this will be the stimulus for another ASEAN country to purchase and compete for our great agricultural products.

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