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Thursday, April 25, 2024

High logistics costs make Vietnam’s produce less competitive

The Saigon Times

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HCMC – High logistics costs have put Vietnam’s agricultural sector at a disadvantage over regional countries, according to insights from a conference organized by the Ministry of Agriculture and Rural Development.

Vietnam’s logistics costs are 6% higher than Thailand’s, 12% higher than Malaysia’s, and a staggering 300% higher than Singapore’s. The country’s agricultural logistics sector is also marred by inadequate infrastructure and limited service capacity.

The road network, despite upgrades, is struggling to handle the volume and types of agricultural goods, particularly perishable crops, resulting in higher costs and spoilage.

In seafood, 12% of production costs are consumed by logistics, while the timber industry bears a 23% cost burden. Fruits and vegetables face a 29% logistics hurdle, leading to higher prices and increased spoilage. A significant 30% of rice production costs are attributed to logistics, impacting farmers’ incomes and food security.

The Ministry of Agriculture and Rural Development has proposed the “Enhancing Logistics Service System to Enhance the Quality and Competitive Capacity of Vietnam’s Agricultural Products by 2030” initiative to address these challenges.

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