In recent years, the export of agricultural and aquatic products to Russia has improved markedly, but it still accounts for a very small market share in the total imports of agricultural and aquatic products of Russia. Overcoming non-tariff barriers, promoting trade promotion, ensuring uniform supply and large quantities are important notes for businesses when they want to promote exports to Russia.
Big market, small market share of Vietnamese products
Mr. Duong Hoang Minh, Commercial Counselor of Vietnam in the Russian Federation, said that Russia is the largest agricultural and aquatic product import market in Eastern Europe, most of imports are tropical agricultural and aquatic products. It is expected that the country’s total foreign trade turnover in 2021 will reach about US$720 billion.
Vietnamese agriculture and fisheries still have many opportunities to promote exports to this market. Recently, the Eurasian Economic Union (EAEU) has removed 76 countries, many of which are competitors to Vietnam’s agricultural and aquatic products, from the list of preferential tariffs when exporting to the EAEU. Meanwhile, most of Vietnam’s agricultural and aquatic products exported to the bloc enjoy tax incentives thanks to the Vietnam-EAEU FTA (EAEU FTA). In addition to the advantages brought by the FTA, enterprises now have many favorable conditions to promote exports to Russia thanks to the increasingly popular Vietnamese dishes in Russia, which are preferred by consumers. Most large commercial centers in Russia have Vietnamese dishes.
However, Mr. Minh also mentioned that although Vietnam’s agricultural and aquatic product exports to Russia increased significantly after the EAEU FTA took effect, they still hold a modest market share. Agricultural products such as tea, cashews, pepper, and fish fillets account for a large share of the total value of goods exported to Russia, but the products are mainly in raw form.
Mr. Dang Minh Khoi, Ambassador Extraordinary and Plenipotentiary of Vietnam in the Russian Federation, said that Vietnam’s agricultural and fishery exports to Russia currently account for 1.1% of Vietnam’s total export turnover of agricultural and aquatic products. In the opposite direction, Russia’s agricultural and fishery exports to Vietnam only accounted for 1.4% of Russia’s total agricultural and fishery export turnover.
Ms. To Thi Tuong Lan, Deputy General Secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP), said that in the first 10 months of 2021, seafood exports to Russia reached over US$140 million, an increase of 4% compared to the whole of 2020 and 31% over the same period last year. This number is not a breakthrough but opens up many opportunities for Vietnamese enterprises. The main products exported to Russia include shrimp (accounting for 33%) and pangasius (14%).
However, considering the whole period since the EAEU FTA took effect, trade between Vietnam and the EAEU is still modest. The outstanding difficulty facing enterprises today is the increase in transportation costs and freight charges. Payments are made in USD, so the unstable exchange rate between the Ruble and the USD has had a significant impact on enterprises’ exports. “Notably, non-tariff barriers such as Russia’s strict food safety regulations and quarantine according to Russia’s own regulations as well as the EUEAFTA are a problem that causes businesses headaches. The number of enterprises licensed to export to Russia is still limited compared to the potential; the registration procedure is complicated and takes a long time, said Ms. Lan.
Similarly, a representative of the Department of Agricultural Product Processing and Market Development (MARD) added that although the Russian Federation is now a full member of the World Trade Organization (WTO), it still applies some imported food safety control measures that are not in line with international standards such as EU, CODEX Commission.
Adjusting food safety criteria
Ms. To Thi Tuong Lan suggested that in the future, it is necessary to strengthen exchanges and cooperation to remove difficulties and promote bilateral payments in local currency as Russia is applying to China and Turkey. At the same time consider opening the Vietnam-EAEU intermodal transport route by train to reduce pressure when transporting by sea; consider increasing the number of Vietnamese seafood enterprises that can be exported to the Russian market.
In order to promote the export of agricultural and aquatic products to Russia, Mr. Duong Hoang Minh said that Vietnamese enterprises need to be more active in market surveys, participate in specialized exhibitions in Russia, and learn about consumption trends. Most Vietnamese enterprises successfully penetrate the Russian market through fairs and exhibitions. Along with that, cooperatives need to ensure uniform production, in large quantities, perform well in post-harvest preservation, and use market-appropriate packaging. “Enterprises also need to research and increase investment in Russia with products with great competitive advantages such as coffee, seafood, fruit,” Mr. Minh said.
Mr. Nguyen Nhu Tiep, Director of the Department of Agro-Forestry-Fisheries Quality Control (MARD) proposed that the Ministry of Agriculture of the Russian Federation and the Russian Federal Agency for Animal and Plant Safety Supervision strengthen technical cooperation, open the market. “It is proposed to sign a technical cooperation agreement on SPS (sanitary and quarantine measures) to support and coordinate to handle issues related to trade between the two countries. This is essential for better implementation of the EAEU FTA. Accordingly, Russian enterprises can export meat to Vietnam and Vietnamese enterprises can export more seafood and tropical fruits to Russia,” said Tiep.
Leaders of the Agro-Forestry-Fisheries Quality Management Department also expressed their desire to cooperate with the competent authorities of Russia to review and adjust a number of indicators on food and disease safety, creating favorable conditions for the development of food safety for enterprises of the two countries. He asked Russia to support Vietnam in human resource training, science and technology transfer in order to improve its ability to control disease and food safety.