Local prices overwhelmed by demand from Chinese market

The price of raw coconut has nearly tripled this year.

The Vietnamese market often sees a soaring price period whenever Chinese markets seek materials. At this time as the year approaches its close, Chinese food-processing and confectionery companies have a high demand for raw materials to produce for the Lunar New Year Festival. Therefore, they are trying to collect agricultural products from Vietnam.

The soaring price has been seen in most agricultural products including fruit, pork and fish.

The price of raw coconut has nearly tripled this year, from VND12,000 ( $0.6) per kilogram to VND30,000 ($1.5) per kg, raising the price of coconut extract, which is often used for producing confectionery, ice cream, and many other products. The price went from from VND22 million ($1,100) per  tonne in the second quarter to VND33 million ($1,650) per tonne in the final quarter.

According to a coconut wholesaler in Ho Chi Minh City, the rise in coconut price results from the high demand from the Chinese market. “Chinese traders are trying to import coconut from Vietnam, also accepting lower-quality products,” she said.

As for pork, there has been a sharp increase in price since the beginning of November, to VND 38,000 ($1.9) per kg in the south and VND42,000 ($2.1) per kg in the north. The reason for this increase is that pigs are being exported in large numbers to China.

According to a representative from the Ministry of Agriculture and Rural Development, hundreds of trucks are carrying at least 100 pigs each to the borders to export to China.

“The price of a pig in China is now higher than that in Vietnam,” said Tran Van Hac, marketing director of CP Company.

In the central region, the price of shrimp has increased by 74 per cent compared to the same period last year and Chinese traders are the biggest customers.

“Chinese traders are paying VND75,000 ($3.75) for each kilogram, much higher than the present exporting price level,” shared Tran Van Linh, director of Thuan Phuoc Seafood Processing Company.

Linh also added that Chinese traders are even coming to some fishing ports in Danang to buy all kind of fish to freeze and then transport to China. Therefore, the price has increased by 10-15 per cent.

The price of rice also increased by 10-15 per cent in August compared to the July price. This increase followed an announcement from the Vietnam Food Association that Chinese traders had bought 500,000 tonnes of rice from Vietnam.

Even some other minor agricultural products like lotus seed, ginger or jackfruit are also being exported to China, greatly affecting local consumers. Last year, confectionery companies only paid VND80,000 ($4) for a kg of lotus seed. This year, the high demand from China has pushed the price to VND190,000 ($9.5).

According to Dang Kim Son, head of the Institute of Policy and Strategy for Agriculture and Rural Development, Vietnam and China are encouraging the trading activities through the borders of the two countries.

Vo Tri Thanh from the Central Institute for Economic Management added that Vietnam should take advantage of its strong products to promote exports. However, the authorities must also control the types and volume of products for export so as not to affect the domestic market.