Agricultural export enterprises accelerate production post Covid-19

The agricultural export enterprises in Dak Lak province are working against the clock to resume production and accelerate exports post Covid-19.

Daklak enterprises are resuming their operations as the Covid-19 pandemic started winding down. Photo: Quang Yen.

The Covid-19 pandemic has pushed Dak Lak's agricultural export enterprises into hard situations as they couldn't meet the orders. The pandemic is now basically under control and they are planning to get export activities back.

Production costs spike due to Covid-19

Skyrocketing production costs due to the Covid-19 have impacted on Daklak September 2nd Import-Export Company Limited (Simexco Daklak).

According to Le Duc Huy, General Director of Simexco Daklak the company’s exports dropped 10% in the first half of this year.

However the company made detailed plans to carry out the "three-on-the-spot" production model in Ho Chi Minh City and Binh Duong.

Besides, as European countries have recovered from the pandemic their demand for coffee is increasing. Despite container shortage and high sea freight costs the company's coffee exports have been stable thanks to surging demand and prices. As a result, the company achieved its set plan by September 2021, and export turnover rose by 20%.

Huy said thanks to promptly taking measures to respond to the Covid-19 Simexco Daklak completed its target by the end of third quarter.

Nguyen Thi Thai Thanh, Director of Ban Me Green Farm Company Limited said the Covid-19 pandemic has brought challenges for export enterprises.

According to Thanh, her company's export activities were delayed due to the disruption of logistic system. Because Dak Lak has imposed social distancing measures the company's production has come into a standstill as it can't afford the cost of "three-on-the-spot" production model

"So, we can't fulfill the export orders and have to cancel deliveries. Besides, due to social distancing we can't find enough workers to harvest crops. In addition, the lockdown in Ho Chi Minh City, a large consumer of agricultural products recently has impacted on our sales resulting in a drop of 80% in turnover compared to a normal year," Thanh said.

The director of Green Farm Company Limited added despite the enormous challenges triggered by the Covid-19 pandemic, the company has maintained commitment to buying products from farmers. The company and farmer came to an agreement of rescheduling debt to hand in hand overcome the pandemic. So far the company has paid 70% of the amount it owns farmers and is managing to pay the rest.

Making plans for export recovery

Dak Lak's enterprises are making plans for restart production and exports in the new normal.

According Le Duc Huy, Simexco Daklak's General Director a new harvest season is coming in Dak Lak' coffee farms. "Vaccination coverage is low in Dak Lak so it's not easy to carry out production with flexibility. As a result, we can face labor shortage in coffee plantations and coffee processing plants. We have taken various measures such as implementing "three-on-the-spot" production model to protect "green zone". We now have a vast stockpile of coffee bean. If our company is shut down we will bear a huge loss," said Huy.

Also according to Huy, the company planned to put up 100,000 tons of coffee for sale domestically. However it is likely to miss the target due to the Covid-19 pandemic.

"With December is the peak harvest time of coffee and if the pandemic can't be under control by then the production will be affected; thereby the company's coffee exports will be impacted in the first quarter next year," Huy said worriedly

Meanwhile Ban Me Green Farm Co.Ltd. has restarted its operations in the new normal . Apart from accelerating production the company is seeking new markets.

Before coronavirus outbreak Ban Me Green Farm exported farm produce to Japan with a volume of nearly 30 tons of tomato and sweet potato. However the company has temporarily suspended exports.

“Our Japanese partners have resumed their imports. Besides, we sent product samples to several partners in Europe to introduce our products and we got some orders for pineapples and carrots. We are now looking for material growing areas to fulfill the orders,” Thanh added.

Dak Lak People’s Committee has recently held a conference to evaluate the exports of goods of the province in the first nine months of 2021, making plans for the last months of the year and putting forward tasks for the year 2022.

According to the report of Dak Lak Department of Industry and Trade, the province’s total export turnover reached US$392 million in the first nine months of the year, equivalent to 60.3% of the target, down 3.2% from a year ago.

Particularly, coffee bean exports reached 150,000 tons (65.2% of the target), instant coffee export reached 5,900 tons (78.7% of the target) pepper exports : 3,700 tons (55.2%) honey exports: 6,600 tons (57.4% of the target), rubber export: 7,500 tons (81.5%), cashew nut exports 190 tons (32.8%) and fruit&vegetable exports: 63 tons (66.3%).

The objective reason for the drop is the disruption of transportation during the Covid-19 outbreak. Apart from that, the subjective reason is that the province mainly exported raw agricultural products which have low value and at the same time the province is lacking large enterprises and disease-free production zones for exports. Besides, many farm products have not yet satisfied global demand.

To meet its export target, the province’s competent authorities will closely follow the clearance of agricultural products at the border gates and promptly inform the local agricultural enterprises of the situation so that they can make plan for transportation properly. Additionally the province will promote the sale of farm produce via e-commerce platforms and develop digital economy in agriculture. Besides, Dak Lak will also focus on exporting high-value farm produce and processed products.

Meeting around 90% of the agricultural export plan

According to Luu Van Khoi, Director of Dak Lak Department of Industry and Trade the Covid-19 pandemic has caused the disruption of logistics system and pushed transportation cost up,

“To help the enterprises overcome the difficulties, we organized various programs on trade promotion. However we did not hold events direct but online to promote investments,” said Khoi.

Khoi said the province’s agriculture export turnover can reach US$600 million, equivalent to 90% of the plan. “We have achieved approximately US$500 million so far and we hope to accelerate exports in the last months of the year as coffee harvest comes at peak,” Khoi added.

Dak Lak’s agricultural export turnover is estimated at US$168 million in the third quarter and the export turnover of farm produce in the whole year will be US$560 million, equivalent to 86.2% of the target. The province will strive to achieve agriculture export turnover of US$680 in 2022.