Reducing logistics costs to strengthen agricultural competitiveness

Source: Fresh Plaza

The Mekong Delta contributes about 90 percent of rice production, 65 percent of aquatic products and 70 percent of fruit production for Vietnam’s exports. However, besides the underdeveloped transport infrastructure, the Mekong Delta also lacks key logistics centers, satellite systems, food safety inspection units and qualified irradiation facilities. Just three logistics centers in the region are not enough to serve the whole region.

Ms. Ngo Tuong Vy, Deputy Director of Chanh Thu Fruits Import and Export Co., Ltd., stated that logistics costs for Vietnamese dragon fruits to the US and the EU currently account for more than 30 percent of production cost. Meanwhile, Thailand’s logistics costs for dragon fruits only account for 15 percent of the production cost.

This means Vietnam cannot compete with other countries in the region. If there are many logistics centers and infrastructure is completed, it will increase the competitiveness of Vietnamese fruits, and farmers will benefit from the reduction in transportation costs.

Dang Phuc Nguyen, General Secretary of the Vietnam Fruit and Vegetable Association, there should be a focus on regional linkage and creating conditions for trade are urgent matters. In particular, it is necessary to have an effective processing and production model soon. To achieve this expectation, it is necessary to have teamwork between the state and enterprises.

To be successful, localities need to have policies for investors on capital and land. If logistics centers are linked together, it will create a large-scale concentrated production area, with high technology and consumption in the value chain of agricultural products, suitable for the global market. As for localities, it is necessary to improve infrastructure and industrial zones towards modernity that link with arterial roads and effectively exploit ports for convenient circulation and transportation of goods.


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