Will agricultural products worth billions of dollars continue their rapid growth this year?

Rice and vegetable exports maintain momentum.

In about two months, farmers in the Mekong Delta will begin harvesting the winter-spring rice crop, the most important crop of the year for the people there. Usually, in previous years, during the peak harvest season, rice prices would drop sharply due to abundant supply, but this year, the situation has completely changed even at this early stage.

Many rice farmers report that traders are constantly "hunting" for rice and asking for advance deposits. Farmers harvesting early winter-spring rice say that the price of fresh, common rice at the field has reached an unprecedented 9,300 VND/kg; while specialty varieties like ST in rice-shrimp farming models are around 10,000 VND/kg. Therefore, there is reason to believe that millions of rice farmers in the Mekong Delta are about to enjoy another bumper crop with high prices.

Rice exports are projected to remain favorable, while domestic rice prices are expected to stay high.

Mr. Nguyen Van Don, Director of Viet Hung Co., Ltd. (Tien Giang), commented: "Currently, Vietnamese businesses are hesitant to conduct transactions or sign new contracts because prices are high and the risks are significant. Even the domestic market is experiencing price increases, especially for specialty rice varieties like ST25, which has increased by 4,000-5,000 VND compared to about 10 days ago, reaching 25,000-26,000 VND/kg. The reason is that this rice recently won the " World's Best Rice" award for the second time, leading to increased demand for gifts and consumption during Tet (Lunar New Year). Although other goods are awaiting the winter-spring rice harvest in the Mekong Delta, prices are still expected to remain high due to limited supply from other sources. Overall, exports will continue to be favorable in 2024 as demand remains lower than supply."

Agreeing with the above viewpoint, Mr. Do Ha Nam, Vice Chairman of the Vietnam Food Association (VFA), predicted: "The average export price of Vietnamese rice in 2024 may maintain the level of 600 USD/ton, and the average price of paddy rice will also be at 8,000 VND/kg. This is because demand for rice is present in all markets, in addition to traditional markets such as the Philippines, Indonesia, and Africa… the Chinese market is also very promising. In recent years, China has used its large reserves to control market prices; this also means they will import again when there is an opportunity for good prices."

Besides rice, fruit and vegetable exports are a bright spot, with growth reaching 69% in 2023 compared to 2022. Commenting on the opportunities in this sector, Mr. Nguyen Van Muoi, Deputy Head of the Southern Branch of the Vietnam Horticultural Association, said: "In 2023, durian was the product that exceeded all expectations, starting almost at zero and ending with a turnover of over 2.2 billion USD. It is predicted that in 2024, barring any unfavorable events, durian exports could reach 3.5 billion USD. The entire fruit and vegetable sector could continue to lead in growth rate, especially after Vietnam and China recently signed a protocol on watermelon exports."

In addition, many products are entering the negotiation phase and there is a possibility of signing protocols this year, such as frozen durian, fresh coconut, and citrus fruits (grapefruit, oranges, tangerines). The demand in the Chinese market is still very large, not only for durian but also for many types of tropical fruits and vegetables from Vietnam. Furthermore, Vietnamese durian also has many opportunities for growth in other markets."

Durian exports are expected to continue setting new records in 2024.

However, Mr. Mười warned that, due to rapid growth in recent times, many quality issues have arisen, and harvesting durian before it is fully ripe has put businesses at risk, leading some to withdraw from the market. The agricultural sector needs to implement measures to control the quality of harvested durian.

"We are developing well in terms of quantity, but we need to gradually improve quality to increase value and continue expanding the market," Mr. Mười suggested.

COFFEE AND PEPPER ARE REVIVED

Coffee and pepper once created a boom in expanding cultivation areas, then experienced periods of sharp price drops that discouraged farmers from investing, but unexpectedly, prices have surged again in the last two years. Coffee prices are now close to reaching 70,000 VND/kg, a price few could have imagined.

Mr. Nguyen Nam Hai, Chairman of the Vietnam Coffee and Cocoa Association (VICOFA), stated: "At the end of 2023, Vietnam's coffee exports reached 1.66 million tons, a decrease of 4.5% compared to the 2021-2022 crop year. However, revenue still increased by 3.4% to US$4.08 billion thanks to higher prices. This is the highest export value in any crop year to date. The average export price of Vietnamese coffee reached US$2,451 per ton, an increase of 5.5% compared to the previous crop year. Thus, it can be said that the coffee industry is gradually reviving and returning to its golden age."

According to Mr. Hai, the decline in coffee exports is also due to increasing domestic consumption. Between 2015 and 2020, domestic coffee consumption increased by an average of 3.94% per year, from 158,000 tons in 2015 to 220,000 tons in 2022. Per capita consumption increased from 1.7 kg in 2015 to 2.2 kg in 2022. Domestic consumption is projected to grow at an average rate of approximately 6.6% per year between 2025 and 2030, reaching 270,000-300,000 tons per year.

VICOFA leaders predict: "With declining production and increased export demand, coffee growers may benefit from attractive coffee prices. Export turnover could also reach a new record, projected to reach 4.5 - 5 billion USD this year."

For pepper farmers, it's probably been a long time since they've felt such excitement for Tet (Lunar New Year). Over the past week, pepper prices have risen above 80,000 VND/kg; major pepper-growing provinces like Dak Lak , Gia Lai, Dak Nong, and Dong Nai have recorded increases ranging from 500 VND/kg to 2,000 VND/kg. On pepper forums, farmers are extremely pleased with the price rebound and predict it could reach over 100,000 VND/kg, similar to its peak.

Speaking to Thanh Nien newspaper , a representative of the Vietnam Pepper and Spice Association (VPSA) stated that in 2023, Vietnam exported 264,094 tons of various types of pepper, including 236,148 tons of black pepper and 27,946 tons of white pepper. Total export value reached US$906.5 million. Compared to 2022, export volume increased by 13.8%, but export value decreased by 8%. The US is currently Vietnam's largest pepper customer, accounting for 23.5% of the total export value of this commodity as of the end of November 2023. Vietnam also holds the position of the largest supplier of pepper to the US market.

Vietnam's second-largest pepper buyer is China, accounting for 14.1%; followed by India and Germany, accounting for 5.4% and 4.3% respectively of the total export value of this commodity. Despite a decline in selling prices, the pepper industry is showing positive signs, with the Chinese market buying a significant amount, and other markets such as India and the US also experiencing renewed growth. The goal of the pepper industry is to rejoin the "billion-dollar club" as early as 2024.

It can be seen that agricultural products worth billions of dollars are looking quite optimistic in 2024 after a breakthrough year in 2023.

According to the Department of Crop Production (Ministry of Agriculture and Rural Development), the total coffee growing area nationwide is approximately 710,000 hectares, of which 653,000 hectares are currently being harvested, yielding 1.845 million tons with a productivity of 2.82 tons/ha. Although coffee prices increased significantly in 2023, coffee cultivation is still unable to compete with other fruit crops such as durian, avocado, and passion fruit. Due to the extremely low coffee prices in recent years, farmers have not invested much in coffee cultivation, except for coffee companies and some cooperatives.

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