Agriculture, forestry and fisheries

Vietnamese consumers recognise Australian food and agricultural produce as high quality, premium products.

Australia’s multicultural population has fully embraced Vietnamese cuisine. Vietnamese exports to Australia are growing to meet the demands of Australian consumers for a diversity of high-quality food and agricultural produce.

Australia has provided long-term support to develop Vietnam’s agriculture sector. Australian technology is being used in Vietnamese agri-businesses, to improve productivity, manage biosecurity risks and assist Vietnam in developing world-class agricultural products. The Australian Centre for International Agricultural Research (ACIAR) Vietnam Strategy 2017-27 supports Vietnam’s priorities in food safety, climate change, soil fertility and efficiency of crop-livestock systems, market knowledge and access, increasing value from forests and increasing value from aquaculture.

Further, as women represent up to 60% of the total labour in the agriculture sector in Vietnam³³, Australia ⎯through the Aus4Equality initiative ⎯ is supporting women farmers in Lao Cai and Son La provinces to switch from staple to higher-value crops and improve standards to meet local and international market demand.

Vietnam and Australia hold an annual bilateral agricultural meeting, the Vietnam Australia Agriculture Forum (VAAF), to discuss bilateral agricultural trade and technical assistance in agriculture. Supporting the VAAF are three technical working groups (plant, animal and seafood, and policy) that advance bilateral market access and cooperation agendas.

Trade

In 2020, Vietnam was the second largest market in ASEAN for Australia’s rural exports, valued at A$1.81 billion. These agricultural exports are essential inputs for Vietnam’s value chains, helping to create jobs and raise incomes in Vietnam’s food processing sector. Australia’s largest food and agriculture exports to Vietnam by value in 2020 included live animals (mainly cattle) (A$525 million), wheat (A$355 million), fruits and nuts (A$145 million), cereal preparations (A$139 million), beef (A$119 million), edible products and preparations (A$103 million) and barley (A$88 million), among other food and agricultural merchandise³⁴.

In recent years, aquaculture and fruit production in Vietnam have increased and become more export-oriented. Australian consumers now enjoy an increasing variety of agricultural produce and foodstuffs from Vietnam. In 2020, Australia’s major imports from Vietnam included fruit and nuts (A$176 million), crustaceans (A$119 million), prepared or preserved seafood (A$115 million), fresh and frozen fish (A$79 million) and coffee (A$52 million)³⁵. Vietnam currently has market access to Australia for mango, lychee, longan and dragon fruit, with export volumes growing strongly. Vietnam was Australia’s largest overall supplier of prawns and prawn products for 2019 and 2020³⁶.

Investment

Leeton-based SunRice’s investment in a rice processing mill in Vietnam’s Dong Thap Province has helped secure rice supply for its established markets, particularly in the South Pacific. This offsets the variable annual rice production in Australia due to fluctuations in water availability.

Consistent with Australia’s foreign investment regime, Vietnamese companies are welcome investors in Australia’s agricultural sector, helping to create jobs in rural and regional areas. Agricultural conglomerate TH Group, Vietnam’s largest fresh milk company, invested A$130 million in three cattle stations in northern Australia in 2020. AnVien Group invested A$18 million in a cattle station in the Northern Territory in 2016.

Further opportunities

Australia’s growing agribusiness and food sector offers further opportunities for investors in Vietnam looking to expand food and fibre production as well as add value to downstream processing industries. These, in turn, are transformed by manufacturers in Vietnam into higher-value products for export to the region.

There are opportunities for Australia to expand agricultural exports to Vietnam. In 2020, Vietnam imported US$26.9 billion worth of agricultural products. Only 4.7% of this came from Australia³⁷. For example, Australia’s cherries and grapes account for just one fifth of Vietnam’s cherry and grape imports, despite their reputation for quality³⁸.

Australia is a promising market for Vietnam’s agricultural sector, particularly for tropical fruits and vegetables. In 2020, Australia imported almost A$800 million worth of agricultural products from Vietnam, but this only represented 3.2% of Australia’s total imports from all economies³⁹.

Vietnam offered in-principle agreement in January 2021 to allow market access for Australian-grown peaches and nectarines, pending agreement on audit arrangements. The approval of the Merrifield Irradiation Facility near Melbourne and the Irradiation Center in Hanoi has significantly reduced processing times and costs for both countries’ fruit exporters. In early 2021, Vietnam added Australian western and southern rock lobsters to its list of approved live imports.

As Vietnam’s agricultural production systems evolve, demand for new technologies and innovations reflective of international best practice will increase. Australia’s globally competitive agtech companies and service providers have the potential to support Vietnam in this transition.

Aquaculture research projects continue to improve the operating environment for fisheries. Projects such as the UTS’s Rapido will advance fishing practices and promote two-way technological exchange.

An agribusiness forumwill help to facilitate the closer engagement between Australian and Vietnamese agribusinesses and foster innovation and technology transfer.