Exchange rate has caused double disadvantage for Vietnamese agricultural exports

The currencies of many countries have depreciated sharply against the US dollar, making agricultural products exported in US dollars disadvantageous.

According to Dr. Nguyen Trung Kien, Head of Market and Industry Research Department of Ipsard, the exchange rate policies of many countries are disadvantageous for Vietnam's agricultural exports.

Many currency devaluations have negatively impacted the export prices of Vietnamese agricultural products (Illustration photo: KT)

Specifically, in 2014-2015, compared to the US dollar, the Brazilian Real decreased by 42%, the Colombian peso decreased by 37%, the Indian rupee decreased by 5%, the Indonesian rupiah decreased by 13%, the Malaysian ringgit decreased by 19%, and the Thai baht decreased by 5%, while the Vietnamese dong decreased by only 3%.

Not only did the currencies of countries that directly compete with Vietnamese agricultural products depreciate, in 2015, the currencies of developed countries also depreciated sharply against the US dollar, such as the euro and Japanese yen, making agricultural products exported in US dollars at a disadvantage in these markets. Therefore, the exchange rate had a double impact on the export turnover of Vietnamese agricultural products.

In fact, in 2014-2015, the export value of some of Vietnam's key agricultural products decreased. Specifically, rice decreased by 2.8%; coffee decreased by 26.8%; rubber decreased by 13.2%; and seafood decreased by 15%.

In the first quarter of 2016, export prices continued to decrease compared to the same period in 2015. Of which, rice decreased by 1%; rubber decreased by 20%; the price of tra fish exported to the US decreased by 16%; coffee exports decreased by 18%. Furthermore, coffee exports decreased in large and traditional markets such as Germany, Italy, Japan, Russia, etc. Rice exports to China and the Philippines also decreased.

Some export items such as wooden furniture, cashew nuts, vegetables, pepper, etc. have good growth in turnover, for example, wood and wooden products, up 10.7%; pepper (up 5%); cashew nuts (up 21%); vegetables (23%) and these items continued to grow impressively in the first quarter of 2016. However, these increases were not enough to offset the decline in total agricultural export turnover.

The International Monetary Fund (IMF) forecasts that in 2016, rice prices will recover from the second quarter of 2016 but will still decrease by 7.4% compared to 2015. In 2016, rice supply decreased due to drought and saltwater intrusion. However, major importing countries proactively coped with food security risks after the experience of 2008. At the same time, inventories in China, Thailand, and India decreased but remained high. Meanwhile, production is expected to recover in the second half of the year due to La Nina increasing rainfall in India, Thailand, and Vietnam. Therefore, the Food and Agriculture Organization of the United Nations (FAO) forecasts that in the coming time, agricultural product prices will be relatively stable, without any price shocks./.

According to VOV