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Danish Crown Prince wraps up successful visit to Vietnam

Danish Crown Prince Frederik and Crown Princess Mary Elizabeth left Ho Chi Minh City on late November 3, wrapping up a successful four-day official visit to Vietnam that demonstrated the two countries’ high-level political commitment to enhancing bilateral ties.

Denmark was one of the first Western countries to set up diplomatic relations with Vietnam, on November 25, 1971. They established the strategic partnership in climate change, energy, environment, and green growth in 2011.

On November 1, the Crown Prince paid tribute to late President Ho Chi Minh and engaged in some meetings with Vietnamese leaders and other important diplomatic events.

He made a courtesy call on President Nguyen Xuan Phuc, met with Vice President Vo Thi Anh Xuan, and attended a ceremony marking the 50th founding anniversary of the diplomatic relations and a sustainable energy forum between the two countries.

At the meetings with the Crown Prince, the Vietnamese leaders affirmed that the visit held special significance as it marked 50 years of breakthrough development of the traditional friendship and comprehensive cooperation and also opened up new prospects for bilateral cooperation.

They noted the countries have much room to expand partnerships, expressing their hope that the Royal Family and Government of Denmark will keep supporting the continued intensification of the two countries’ comprehensive partnership. They also called on Denmark to continue sharing experience and giving technological and financial assistance to Vietnam to carry out climate commitments.

The hosts added they hope Danish enterprises will increase investment and operate successfully in Vietnam in the areas matching their country’s strength and the Southeast Asian nation’s demand, thereby capitalising on opportunities generated by the EU – Vietnam Free Trade Agreement (EVFTA).
The two sides agreed to expand ties to education – training, cultural exchange, and tourism so as to strengthen friendship and mutual understanding between their peoples, as well as the thriving relations.

During the trip, Crown Prince Frederik and his entourage also participated in several activities promoting cooperation in wind energy and energy efficiency between Vietnamese and Danish businesses.

In the presence of the Crown Price and Crown Princess, 14 memoranda of understanding on cooperation were signed at the Vietnam – Denmark sustainable energy forum in Hanoi on November 1.

There, Frederik said despite different starting points, Vietnam and Denmark will work together toward a green future.

The Crown Price and Crown Princess also made fruitful working visits to Hai Phong city and Ha Nam province.

In Hai Phong, Crown Prince Frederik took part in an event promoting trade and investment in offshore wind power, joined local children in a programme simulating wind power, and visited Hai Phong Port and some industrial parks set to be fuelled by offshore wind power.

In Ha Nam, Crown Princess Mary Elizabeth attended an event connecting Danish enterprises and local firms in terms of green transition and energy efficiency, and visited a cement factory using equipment and technology supplied by Denmark’s FLSmidth group in Thanh Nghi commune of Thanh Liem district. She also visited the Thanh Nghi Primary School and the Tam Chuc tourism site.

Their last destinations were Ho Chi Minh City and neighbouring areas, which accommodates a large number of Danish businesses in Vietnam.

Notably, the Crown Prince attended a ceremony marking the start of the construction of a Danish-invested LEGO factory in Binh Duong province. The factory, the biggest FDI project in this southern industrial hub, has a total investment of over 1.3 billion USD, helping turn Denmark into the third largest foreign investor in Vietnam in 2022.

Viet Nam set to export 7 million tonnes of rice this year

Việt Nam, the world’s second-largest exporter of rice, is on track to export 7 million tonnes this year after India banned exports of broken rice and imposed a 20 per cent duty on exports of various grades of rice in early September as the world’s biggest exporter of the grain tried to boost supply and calm domestic price after below-average monsoon rainfall hindered planting.

The price of Vietnamese rice has increased by US$30 compared to before the ban to fetch $408-428 per tonne.
Another contributor was improved rice quality as local governments, along with farmers and cooperatives, continued to push for smaller production with higher quality and less frequent use of fertilisers and insecticides.
Nguyễn Anh Tuấn, CEO of Green Stars JSC., a Vietnamese rice trader based in HCM City, said farmers had reported a 10-15 per cent decrease in cost since with an increase of 8-10 per cent in profit on average.
He said, however, the new approach has not been moving evenly in all localities as traditional cultivation methods still prevailed.

“It’s very important for farmers and exporters to work together in producing high-quality rice with minimum use of insecticide for export,” he said.

“Farmers need to know their new products will have buyers before they can make the transition.”

Meanwhile, farmers still experienced difficulty connecting with exporters, according to Trần Thái Nghiêm, deputy head of southern Cần Thơ Province’s Department of Agriculture and Rural Development.

The market remained susceptible to small intermediaries’ influence without a direct channel and there have been incidents in which intermediaries offered to purchase a small quantity of rice but at significantly higher than the market price, creating complications in establishing a price that could be accepted between exporters and farmers.

Nghiêm urged the Ministry of Agriculture and Rural Development (MARD) to start announcing a base price for rice during a harvest as a stabiliser for the market and to help exporters and farmers reach price agreements faster.

Regarding the market of China, Việt Nam’s second largest rice importer, La Vân Phi, President of Đại Dương Seed Trade Investment JSC., an agricultural research company, said China has been ramping up efforts in phytosanitary in recent years.

He advised exporters to stay up-to-date with China’s phytosanitary rules, which have become more demanding and will continue to expand for a foreseeable future.

Phi urged exporters to take advantage of increased Chinese appetite for higher-quality rice but not ignore the mid-level segment as there was still significant demand among consumers in China.

Lê Thanh Hòa, deputy head of agriculture processing and markets under MARD said China was, is and will continue to be one of Việt Nam’s most important markets as the world’s most populous country still has huge demand for foodstuff.

However, getting into China has become much more difficult. According to MARD, there were only 22 Vietnamese exporters with a valid license to export rice with a quota set by the Chinese government at 2 million tonnes as the two countries have been in negotiations to adjust.

Packaging, branding and product origin rules have also become more demanding with smaller margins of error and stricter quality standards.

Other large markets included the EU and the UK, both have seen upticks in the volume of Vietnamese rice export since the signing of numerous trade deals and agreements.

FROM THE BEGINNING OF THIS YEAR

Sweden exports to Vietnam

Sweden imports from Vietnam

Denmark exports to Vietnam

Denmark imports from Vietnam

Norway exports to Vietnam

Norway imports from Vietnam

EVFTA

Vietnamese firms making relatively good use of EVFTA

Vietnamese enterprises are making relatively good use of the EU-Vietnam Free Trade Agreement (EVFTA), a recent survey revealed.

The survey of enterprises’ awareness of the EVFTA was conducted by the Centre for WTO and International Trade under the Vietnam Chamber of Commerce and Industry (VCCI).

It found that nearly 94 per cent of enterprises in Việt Nam had heard or known about the EVFTA at different levels, which is the highest rate among the FTAs signed by the country at present. Three out of 10 businesses have relatively good knowledge and one in 10 have very good knowledge of the commitments related to business activities under the EVFTA.

Nguyễn Thị Thu Trang, director of the WTO and International Trade Centre, said the benefits provided from the deal should be big enough to attract attention from local enterprises. Attention varied across different sectors, but this FTA might be generating the most economic benefits.

According to the survey, four out of 10 enterprises reported they had gained from the EVFTA, especially preferential tariffs for exports and imports.

The majority of respondents also said they were benefiting from new opportunities under the EVFTA in terms of forming partnerships, receiving more orders, and gaining more revenue and profits from the engagement in supply chains to serve trade with the EU.

About 17 per cent of enterprises said they had benefited from preferential tariffs for at least one batch of exports under the EVFTA, and 16 per cent gained this benefit for import batches.

However, up to 59 per cent of enterprises also reported they hadn’t benefited from the agreement over the last two years, explaining that they hadn’t made any transactions with EU partners during the period to capitalise on the deal. Other reasons included businesses’ limited capacity or obstacles related to the agreement in the EU and Việt Nam.

Meanwhile, 4.2 per cent of firms noted they had suffered losses under the deal, mostly in terms of increased compliance costs and greater competition pressure from EU imports.

Trang said with nearly 20 per cent of enterprises having made use of the EVFTA in the first two years of enforcement, they had gained momentum for continued capitalisation of the EVFTA after the EU’s Generalised System of Preferences (GSP) expires. If businesses proactively learn about EVFTA-generated opportunities, they will have a smooth transition from the GSP to the EVFTA.

OTHER NEWS

Agricultural sector aims to increase use of organic fertilizer

The Ministry of Agriculture and Rural Development (MARD) aims to have local production using 25 per cent organic fertilisers in the next three years.

MARD also planned to increase the amount of qualified production by 1.25 times, equivalent to 5 million tonnes per year.

MARD said it would develop the production and use of organic products, while maintaining efficiency and sustainability, and contributing to promoting added value and protecting the environment.

The industry is developing a model for the use of organic fertilisers, using economical, balanced and effective fertilisers in nine key national crop groups.

In the action plan to increase production and use of organic fertilisers, and to use fertilisers economically, in a balanced and efficient manner for the 2022 – 2025 period, MARD will review a new system of standards and regulations.

It will support the registration and recognition of organic fertilisers that do not have to be tested in accordance with the law to develop a rich and diverse set of products in terms of quantity and type. New organic fertiliser products will also be researched and developed through the selection of input materials and appropriate production technology.

It will encourage the development and use of self-produced organic fertilisers on an industrial and household scale, taking advantage of abundant and available by-products in cultivation, husbandry and aquaculture, agricultural product processing, and domestic waste.

In June 2022, Director of the Plant Protection Department, Hoàng Trung, said that the proportion of organic fertilisers in the total production of the country had increased significantly compared to 2017, from 6.3 per cent to 23 per cent. At that time, more than 4,000 organic fertiliser products, an increase of more than 8 times, were in circulation.

The number of factories and fertiliser production capacity both increased by 1.7 times and 1.4 times, respectively. Total production of industrial organic fertiliser increased by 2.5 times.

“This is an achievement and a good sign for agricultural production because it has helped reduce the pressure on nutrient supply for crops in the context of high prices of inorganic fertilisers,” said Trung.

Total fertiliser production capacity of Việt Nam reached 29.25 million tonnes per year, including organic fertiliser. If the production of local fertiliser producers runs smoothly, they can meet domestic demand for nitrogenous and phosphate fertilisers, particularly in potash and NPK.

Danish firms contribute to green transition in Việt Nam

Under the theme ‘Creating a greener future together’, the Crown Prince and Princess of Denmark led a business delegation to Việt Nam on 1-2 November consisting of more than 30 Danish companies with cutting-edge technology and know-how on sustainability and green transition.

The Crown Prince and Princess witnessed the signing of 14 Memorandums of Understanding between Danish and Vietnamese companies at the grand opening of the Denmark – Việt Nam Sustainable Energy Summit.
An important focus of the visit is the promotion of green and sustainable businesses between Denmark and Việt Nam. In recent years, the economic and commercial relations between the two countries have expanded substantially. The total value of bilateral trade in goods more than doubled during 2013-17 and keeps rising.

During this trip, the couple paid visits to a number of Danish companies that have established strong bases and long-term business co-operation with Việt Nam. In Hà Nội, the Crown Prince visited the factory of Julie Sandlau, a famous Danish jewellery brand. This factory was founded in 2006 and is now among the world’s leading sustainable jewellery manufacturers, which puts a high focus on Environment, Social and Governance (ESG).

He also attended the opening of the new office of Copenhagen Offshore Partners (COP). COP is a sister company of Copenhagen Infrastructure Partners (CIP) and they are leading global investors/developers in the offshore wind industry. CIP and COP are now developing a pipeline of early-stage offshore wind projects in Việt Nam, starting with the 3.5GW La Gàn offshore wind project in Bình Thuận Province and multi-GW projects in other provinces.

In HCM City, he visited Scancom, a leading global manufacturer of outdoor furniture with more than 3,500 employees in Việt Nam. In addition to Scancom’s efforts to create outstanding products that combine international design expertise with state-of-the-art production techniques, the company highly commits to Corporate Social Responsibility and Sustainability.

He also attended the opening of the new office of Vestas, a world-leading Danish company in renewable energy. The opening of Vestas’ new office in HCM City showed Việt Nam as an attractive and increasing market for sustainable energy solutions.

“Việt Nam is a high-potential market and a strategic partner for Denmark in the transition to a greener and more sustainable future. This event marks a new significant milestone on Vestas’ sustainability pathway and the growth of the green energy ecosystem in Việt Nam. Furthermore, this space is crucial as Vestas focuses on developing the next generation of local talent to support Vestas’ current growth and future ambitions in the country,” said Mads Clausen, Country Manager for Vestas Việt Nam.

Wind power is vital for Việt Nam’s development, helping the country to fulfil its commitments to net zero emissions by 2050 made at the COP26 Global Climate Change Summit. With timely support and favourable policies from the government, Việt Nam has quickly become one of the leading countries in the region concerning renewable energy with even greater potential waiting to be unlocked.

Finally, the Crown Prince attended Carlsberg’s 175th Jubilee. Being the oldest Danish brewery brand, Carlsberg came to Việt Nam in 1993 and became one of the earliest major Danish investors in Việt Nam. Carlsberg has a long-term plan to double the size of its operation in the next five years while reducing its carbon footprint through an environmentally friendly production process.

“Việt Nam’s commitment to 2050 net-zero emission target sends an important and strong signal regarding the country’s direction towards green and sustainable development. This makes Việt Nam an even more interesting destination for Danish investments. Denmark and Viet Nam have already accomplished a lot together. Still, the potential for future cooperation, especially in trade and investment, remains huge. I hope that cooperation between Danish and Vietnamese companies in the years to come will lead to the creation of many new and state-of-the-art products that can compete on the world market,” said Nicolai Prytz, Ambassador of Denmark to Việt Nam.

On the occasion, global offshore wind leader Ørsted announced its latest cooperation agreement in Việt Nam with Doosan Enerbility Vietnam, focused on infrastructure and boosting local supply chains for offshore wind.

With the signing of this MoU, the two companies take charge of leading the development of an offshore wind foundations supply chain in Việt Nam. In addition to the domestic aspect, the collaboration also has an export angle to support Ørsted’s significant global pipeline of offshore wind projects.

Jaeyi Kim, Senior Vice President of Doosan Enerbility, said: “This MoU will underpin Doosan Enerbility Vietnam to unleash its potential towards the offshore wind power industry and facilitate Vietnamese excellence moving forward in the global market. On top of this, we are delighted to be a part of Ørsted’s vision to create a world that runs entirely on green energy through this MoU.”
There are 135 Danish companies with a legal setup in Việt Nam. Due to their strong competencies, many Danish companies are well placed to meet Việt Nam’s high demand in industries such as clean energy, agriculture, food safety, water, waste management, maritime transport and logistics.

Denmark is also one of the biggest European investors in Việt Nam.

The official visit to Việt Nam by the Crown Prince and Princess is part of the 50th anniversary of diplomatic relations between Denmark and Việt Nam, which had been delayed due to the COVID-19 pandemic.

Viet Nam should produce green, clean goods to win over European consumers

Vietnamese companies must understand trends in the EU consumer market, which is undergoing a significant shift towards green and clean goods that meet international labour and environmental standards, Eurocham said.

At a seminar on exporting to the market held in HCM City last week, Jean-Jacques Bouflet, vice president of EuroCham, said EU markets are interested in the production processes.

“So enterprises must anticipate this trend to accelerate the effective implementation of the EU-Việt Nam Free Trade Agreement [EVFTA].”

According to Eurocham, the EU has a set of policies and actions called the European Green Agreement, whose goal is that its economy will be more sustainable and carbon neutral. The action plan also seeks to reduce pesticide use by 50 per cent and increase the share of lands under organic crops to 25 per cent by 2030.

“This means pesticides will be banned in the EU, and residue levels will gradually decrease in the coming years. Vietnamese businesses need to pay attention to this organic consumption trend in their long-term development strategy,” Bouflet said.

He warned that the EU constantly tinkers with regulations, and exporters need to remain on top of the changes.
To enjoy preferential tariffs, Vietnamese goods exported to the EU must meet two basic conditions: comply with the required market sanitary and phytosanitary standards and meet the rules of origin.

Vegetables, processed foods, textiles, leather goods, chemicals, footwear, plastic products, and some others are mainly the product groups that need to comply with the rules of origin.

Eurocham also warned there is a gap between Vietnamese and international standards, pointing out that for instance Việt Nam applies VietGap standards but global consumers prefer Global Gap, BAP and other international standards.

Bouflet said: “Vietnamese enterprises need to focus on EU standards. It will be difficult and costly in the beginning, but over the long term it will help penetrate the EU market sustainably.”
Access to the EU market would open doors to other markets, but it requires business leadership and Government support, he said.

Việt Nam’s exports to the EU are worth around US$40 billion a year.

Agricultural byproduct exports surge on boom in international demand

Vietnamese companies are marketing their agricultural byproducts to the global vegetarian community, leading to a surge in their exports.

These products did not use to be in much demand but with the diversity of food in the vegetarian community, people have started to look at how to use them in their diets.

Nguyễn Ngọc Lâm, deputy director of Tân Gia Thành Import-Export Company, said when sugarcane and jackfruit could not be sold for reasonable prices domestically, his company had sold them and their byproducts in the international market.

Since then it has found exporting agricultural byproducts lucrative, he said.

It exports around 75 tons of unripe jackfruit to many countries including the US, Russia and Singapore.
It has also exported 20 tons of young areca berries to the US and soon plans to enter the Japanese market.
Phạm Đình Ngãi, director of Sokfarm Company, said after exporting condensed coconut nectar and coconut flower sugar to Japan and the Netherlands, the company has now created some new product lines like coconut flower soy sauce and coconut flower nectar vinegar to introduce to the Korean and European markets.

“Coconut flower nectar is a good product for people who are on a diet because it has a low sugar level and is rich in minerals. Coconut has always been one of Việt Nam’s most profitable trees and so the opportunities to develop products from it are endless.”, Ngãi said.

Though demand for these products is rising this year, raw material supply is unreliable.

Lâm said his company has been getting more orders for the byproducts, but it could not meet them since raw materials are from small local farmers, which means the quality is not consistent.

The government should direct provinces to create specialised farming areas for these crops to prevent this, he added.

Đặng Phúc Nguyên, general secretary of the Việt Nam Fruits and Vegetables Association, said that agricultural byproducts are now being sought by countries around the world, and Việt Nam should take advantage of this.
“Companies need to upgrade their processing facilities and product quality to meet the huge demand in many large markets such as Europe, Korea and Japan,” Nguyên said.

Vietnamese coffee exports set a new record

Despite inflation and difficulties in trade, Việt Nam’s coffee exports recorded strong growth, according to experts, who expect a record US$4 billion in export value this year.

According to the Ministry of Agriculture and Rural Development (MARD), coffee exports in the first nine months of 2022 reached nearly $3.1 billion, up 37.6 per cent over the same period last year. Export coffee prices rose nearly 22 per cent to an average of about $2,280 per tonne.

MARD’s data showed the European Union (EU) continued to be Việt Nam’s largest coffee consumption market with a market share of 39 per cent in the first eight months of the year, reaching nearly 490,700 tonnes with a value of $1.1 billion, an increase of over 27 per cent in volume and over 54 per cent in value from the same period a year ago.

According to the Institute of Policy and Strategy for Agriculture and Rural Development, in the EU, Việt Nam’s coffee exports to markets such as Belgium, Spain, the Netherlands, France, and Portugal have increased sharply compared with the same period last year. Despite inflation reaching a 20-year high, coffee exports to the EU still grew well.

The institute highlighted that coffee is an essential commodity, an indispensable drink of Western countries, and that the tariff reductions from the EU-Việt Nam Free Trade Agreement (EVFTA) also bring a great advantage for coffee exporters to this market.

Phan Minh Thông, chairman of Phúc Sinh Joint Stock Company, said that “coffee, like food, is an essential commodity for many countries so no matter how difficult it is, the demand still needs to be met. That has driven the growth of this item.”

Besides the EU, the amount of coffee exported to other markets also achieved impressive growth, including Russia up 17.3 per cent, the UK increased by 57.9 per cent, India increased by 116 per cent and Mexico spiked 52 times. In general, coffee exports to major markets increased as demand recovered after the COVID-19 pandemic, while global supply tightened due to crop failures and supply chain bottlenecks in some major producing countries.

Notably, the UK was the fifth largest coffee consuming market in Europe, after Germany, Italy, France and Spain. Việt Nam’s coffee exports accounted for a large chunk of the UK’s coffee imports, increasing sharply from 16.3 per cent in the first six months of 2021 to 29.9 per cent in the first six months of 2022, according to MARD data.

In the first eight months of 2022, Việt Nam’s coffee exports to the UK market reached 34,700 tonnes, worth $70.7 million, up 57.9 per cent in volume and 84.2 per cent in value over the same period in 2021. The free trade agreement between Việt Nam and the UK and Northern Ireland (UKVFTA) helped boost coffee export turnover to the UK market, said experts.

Regarding the US, the country still has high demand for coffee. Statistics from the US International Trade Commission said in the first six months of 2022, US coffee imports reached 833,960 tonnes, worth US$4.68 billion, up 5.4 per cent in volume and up 51.3 per cent in value over the same period in 2021. The average import price of Vietnamese coffee to the US reached $5,615/ton, up 43.5 per cent over the same period in 2021.

In terms of supply, the US increased coffee imports from main suppliers Colombia, Việt Nam and Guatemala but reduced imports from Brazil and Honduras, said the data.

In the Chinese market, instant coffee and ready-to-drink coffee are capturing a large market share thanks to convenience of use. Demand for coffee in China is growing at an average rate of 15 per cent per year.

Nguyễn Nam Hải, chairman of the Việt Nam Coffee and Cocoa Association, said that while other markets mainly imported green and raw coffee, China tended to import instant and processed coffee products. Therefore, Vietnamese businesses could focus on this segment to enhance added value.

Phan Minh Thông said the growth in coffee exports was also due to the fact that the global supply from the crop year 2021/2022 was lower than demand, as the world’s leading coffee supplier Brazil reduced coffee production.

“The Brazilian Coffee Exporters Association (Cecafe) forecasts that the country’s coffee stocks will only reach 7 million 60kg bags in March 2023 and be a record low for the world’s number one coffee producer,” Thông said.

Meanwhile, he said Việt Nam was about to enter the coffee harvest season 2022/2023, and forecast coffee output could increase by 10 per cent in the season.

Data from MARD showed local coffee yield has increased from 23.5 quintals/ha in 2011 to 28.2 quintals/ha in 2021 and output increased from 1.27 million tonnes in 2020 to 1.81 million tonnes in 2021. Currently, Việt Nam’s coffee yield was more than three times higher (2.8 tonnes/ha) than the world’s average coffee yield (0.8 tonnes/ha).

“The market demand for sustainable products is growing strongly, even 100 per cent every year, so this is an opportunity for businesses to produce and export coffee in particular and agricultural products in general,” Thông said.

MoIT asks EU to remove EO controls on instant noodles

The Ministry of Industry and Trade (MoIT) recently sent a document to the Sanitary and Phytosanitary Measures Việt Nam Office requesting comments from the EU on gradually removing ethylene oxide (EO) controls on instant noodles.

The MoIT has coordinated with focal point agencies to fulfil the transparency obligations required by the Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement) of the WTO in Việt Nam. The Việt Nam SPS Office, Ministry of Agriculture and Rural Development is tasked with informing and asking questions about the contents and regulations on food hygiene and safety and animal and plant quarantine.

At the same time, it also coordinates requesting WTO member countries to provide information on measures and procedures for risk assessment, inspection, and other related issues on food safety, hygiene products, and animal and plant quarantine.

The MoIT also cooperates with ministries and sectors and actively participates in conferences, seminars, and formal and informal meetings on transparency inimize by the SPS/WTO Committee.
Currently, the MoIT continues to announce monthly drafts and regulations on SPS of WTO member countries to localities and industry associations and receive feedback, answers, and guidance for contents affecting business activities, including the import and export of goods.

The European Union (EU) has put Vietnamese instant noodles products under Regulation (EU) 2019/1793 to control ethylene oxide (EO) residues since February this year.

Until now, after more than eight months of implementing the above regulation, the certification for each shipment of instant noodles exported to the EU has been creating a significant burden of administrative and commercial costs for Việt Nam.

Therefore, MoIT has requested the working group of the SPS Office Việt Nam to discuss with relevant agencies, raising concerns about differences in the application of regulations to control ethylene oxide residues in food by countries and regions.

At the same time, the ministry asked the EU to provide statistics and assessment on the control of EO residues in instant noodles originating from Việt Nam from February to the present, clarify the basis for application and maintenance as well as maintain and inimize testing measures and EO residue certification requirements, and develop a plan to phase out these measures.