China has begun imposing more stringent requirements for Vietnamese agricultural products, and exporters are in trouble.
According to the Ministry of Agriculture and Rural Development (MARD), Vietnam exported around 1.08 million tons of cassava and cassava products in the first five months of 2019, worth around $414 million, down 17.6 percent in volume and 11 percent in value year-on-year. China is Vietnam's biggest export market for these items, making up 89 percent of the turnover.
The ministry noted a sharp decline in cassava exports via official channels as well as cross-border trade. Because export prices are falling sharply, businesses are holding on to their cassava stock instead of trying to export them, the ministry noted.
Along with cassava, the export of watermelons, bananas and lychees has also fallen, it said.
On May 1, China Customs began implementing new regulations on fruit imports from Vietnam. Watermelons, instead of being wrapped in straw as usual, must now be covered with styrofoam mesh or other materials that do not serve as a habitat for pests.
China has also requested that jackfruit be wrapped in kraft paper, or contained in carton boxes with printed traceability information. Bananas must be put into paper boxes or plastic bags with codes of origin printed and traceability information available, and lychees must be packed in foam containers with printed stamps.
China has been increasingly tightening regulations because Vietnamese exports to China have a history of problems, including counterfeit certificates, declarations and orders, the MARD noted.
Vietnamese goods have also been violating quality standards for agricultural products set by China, it added.
In 2018, Nanning (Guangxi, China) imported 1.53 million tons of Vietnamese fruit, of which 140 batches (mainly longan, bananas, and rambutan) were found to contain harmful organisms, failing to meet quality standard.
Also in the past year, Nanning imported 1.19 million tons of Vietnamese cassava starch, but found 3 batches that did not meet quality requirements, with higher than permitted lead content.
In addition, Chinese authorities also suspect that third countries are "borrowing" Vietnamese origin to send goods into China. For instance, chillis imported from Vietnam is suspected of being from India, because their size and characteristics differ from Vietnamese chillis. Indian chillis has not yet received approval for being exported to China.
According to the MARD, China continued to be the largest export market for Vietnam in the first four months of the year, accounting for 74.26 percent of the total export turnover.