Why Vietnamese Agricultural Products Remain in Raw Form

03/07/2025 20:23

Despite having fertile land, diverse crops, and rising global demand, over 90% of Vietnam’s agricultural products are still exported in raw form. This long-standing reality reflects a deeper structural challenge: the country continues to miss out on value-added potential and remains dependent on exporting raw goods at low prices.

Take coconuts, for example. In early 2025, prices for dried coconuts in southern Vietnam peaked at nearly 19,000 VND per fruit, driven by market demand. However, 40–50% of coconuts in major producing provinces like Bến Tre are still exported raw. Meanwhile, domestic processing factories are struggling to secure input materials, operating below capacity, or even forced to import coconuts to meet demand. In the first four months of 2025 alone, Vietnam spent over 183 billion VND on importing raw coconuts — 11 times higher than the same period last year. It’s a paradox that highlights the country’s over-reliance on low-value exports.

Soybeans tell a similar story. Once cultivated on 200,000 hectares, the crop is now reduced to around 30,000 hectares due to poor returns for farmers. Yet experts point out that if soybeans were processed into soy milk or high-value compounds like isoflavones (as done in Japan), income per hectare could multiply — reaching up to 2 billion VND. The issue lies not in the crop, but in the lack of investment in technology, processing facilities, and supportive policy.

Even with coffee — Vietnam’s export success story — the gap remains wide between raw output and high-value products. From January to May 2025, the country exported over 823,000 tons of coffee, earning nearly US$4.7 billion. Yet only 20% of that was processed coffee. The remaining bulk was raw beans. Processed Vietnamese coffee still faces stiff competition abroad, especially from countries with strong domestic support policies and established brands.

What’s holding Vietnam back? Experts say it’s a mix of outdated policies, insufficient investment in deep processing, underdeveloped supply chains, and a lack of cohesive branding. Small and medium enterprises — the backbone of Vietnam’s agri sector — often lack the scale, capital, and technical capacity to move up the value chain. Meanwhile, raw exports enjoy low taxes, giving little incentive to process locally.

There are promising solutions. One is to impose export taxes on raw products — like coconuts — to encourage domestic processing. Another is to provide incentives and support for companies investing in modern processing lines, traceability systems, and sustainable packaging. Programs like OCOP (One Commune One Product) can help elevate local specialties to national and global brands. The coffee industry, for example, is aiming to reach US$6 billion in exports by 2030, with at least 30% coming from processed coffee.

Vietnam’s agricultural future doesn’t lie in producing more — but in producing smarter. By shifting from quantity to quality, and from raw to refined, Vietnam can stop being a raw materials exporter — and become a true global brand in agriculture.

Source: congthuong.vn