Vietnam's agricultural, forestry, and fishery products have many opportunities to promote exports to the Russian market. However, to realize these opportunities, Vietnamese firms need to carefully study the market and make good use of the incentives of the Free Trade Agreement between Vietnam and the Eurasian Economic Union (VN- EAEU FTA).

Vietnamese firms need a strategy to supply agricultural and processed
agricultural products to Russia’s retail systems. Photo: Internet 

Exports increased by more than 34%

According to the General Department of Customs, Vietnam's agricultural, forestry, and fishery exports to Russia have grown strongly since the beginning of 2020. In the first seven months of this year, exports of agricultural, forestry, and fishery products to this market increased by 34.2% over the same period last year, reaching US$323.26 million.

Typical items with high growth in export turnover compared to the same period last year are: seafood up 66%, vegetables up 47.6%, cashew nuts up 59.76%, pepper up 71.3%, coffee up 3.5%, especially rubber up 230.8%. However, there are still several items with a decrease in export turnover to this market, such as tea, rice, wood, and wood products.

According to the Ministry of Industry and Trade, Vietnam's rice exports to Russia decreased because its price was about US$100-150/ton higher than that of other countries, making it difficult to compete, especially with rice from India.

Regina Budarina, Vice President of the Russia-Vietnam Friendship Association, said: "Vietnam's rice products are quality and branded, but Russian consumers prefer Indian rice due to competitive prices."

Besides, the fact that Russian consumers tend to use parboiled rice also reduces the competitiveness of Vietnamese rice.

Vietnam has been the largest coffee supplier to Russia for years. However, Vietnamese branded coffee is not widely available in Russia’s supermarket chains. The main reason is because Vietnamese coffee is imported into Russia in the form of raw materials (about 99% of Vietnamese coffee exported to Russia is raw coffee, only 1% roasted coffee).

According to the Vietnam Trade Office in Russia, some Vietnamese agricultural and processed agricultural products have gradually approached the Russian retail systems such as pomelo, dragon fruit, chili sauce, and dipping sauce, but the number of items is still limited.

Promote market research

Regina Budarina said there were opportunities for Vietnamese goods to enter the Russian market, especially agricultural products, food, and beverages. However, many Vietnamese products are not well known in Russia despite the great market demand. For example, fresh Thai mangoes in Russia are abundant, but Vietnamese mangoes are quite rare without many channels for consumption. Therefore, customers must go to Vietnamese markets or Vietnamese cafes.

From the perspective of Russian enterprises, Tatiana Aptel, representative of X5 Group (a corporation with a large retail network in Russia), said X5 Group currently has more than 17,352 convenience stores across Russia. X5 Group is very interested in Vietnamese products such as fresh food, tropical fruits, dried fruits, and seafood.

"The group has a process from bidding, importing, and then moving to distribution places. We can import goods directly from foreign enterprises with the cooperation motto of equality, transparency, and openness," said Tatiana Aptel.

Based on the potential and strengths of Vietnamese products, Regina Budarina said that to access the Russian market, Vietnamese firms need to follow the shortest path, which is to promote market research. On the one hand, businesses must spend a lot of money on this activity, but in the future, it will be useful for their activities in Russia. At the same time, organizations of Vietnamese enterprises should hold regular seminars and exhibitions to bring Vietnamese brands closer to the Russian market. On the other hand, to reduce transportation costs, they should study transportation by rail through China; establish more Vietnam - Russia commercial offices for small and medium enterprises to participate in exchanging experiences.

According to Nguyen Thi Thanh, chairwoman of the Vietnam - Europe International Business Association (Vietnam Private Business Association), Russia is a special market that Vietnamese businesses are interested in, looking forward to promoting cooperation, investment, technology transfer, contributing to promoting two-way import and export. The current limitation of Vietnamese and Russian enterprises is the lack of information about each other's markets. "In the future, we will choose units with specific goods and full information to support and accompany in promotion and deeper trade with Russian partners," said Thanh.

The Vietnam Trade Office in Russia has connected many Vietnamese firms to export agricultural products such as ginger, grapefruit, and vegetables to the Russian supermarket chain. However, Vietnamese firms still have difficulties in supplying goods in large quantities and for the long-term.

"To export stably to the Russian market, Vietnamese firms need to build a supply system in the host country to supply supermarket chains," said a representative of the Vietnam Trade Office in Russia.

Additionally, to increase the export turnover of agricultural, forestry, and fishery products to Russia, Vietnamese firms need to study carefully, take advantage of the incentives of the Vietnam - EAEU FTA, boldly invest in the production and consumption of goods in this large market.

Along with the connecting efforts of trade promotion organizations and domestic industry associations, amid the pandemic, the Vietnam Trade Office in Russia will continuously promote activities to provide information to connect trade, support businesses in the online environment as well as provide direct support, organize seminars, and trade businesses, which focuses on each specific industry and field to create opportunities and facilitate Vietnamese goods to enter the Russian market.