AUSTRALIAN cattle exports to Vietnam may have halved in the past two years.
But overall agricultural opportunities, particularly increasing joint-venture investments between the two countries, are “absolutely huge” says Assistant Agriculture and Water Resources Minister Anne Ruston.
Senator Ruston spoke to Fairfax Agricultural Media about her impressions of the expanding Vietnamese farm economy and agribusiness growth opportunities in the socialist/communist regime, following a visit last week.
Her prime purpose was to represent Australia at the Asia-Pacific Economic Cooperation (APEC) ministerial dialogue on food security and sustainable agriculture where she delivered a keynote address.
Senator Ruston said her main message to APEC countries was that Australia takes its role in the region “very, very seriously” and would continue to work with them, “particularly those that are keen to have our support, especially for capacity building”.
She said the Australian government’s attitude in the region was moving away from one of aid related assistance and more towards capacity building assistance, like expanding agricultural production.
The Australian Centre for International Agricultural Research currently has close to $100 million invested in over 170 collaborative research projects in Vietnam, ranging from livestock production to policy development, food safety, fisheries and forestry.
Senator Ruston’s trip also coincided with the revelation of new conditions being agreed to for exporting Australian cherries into Vietnam, and in exchange, protocols were ticked-off for the export of Vietnamese dragon fruit into Australia.
“Whilst we were delighted to get cherries into Vietnam we’ve also agreed for them to export dragon fruit into Australia,” she said.
“Vietnam has a huge and growing dragon fruit industry and they’re justifiably very proud of their dragon fruit and have been seeking to be able to export it into Australia.
“We’ve now announced that they’ve met all of our protocol requirements for them to be able to do so, so we’ll see the first shipment of dragon fruit arriving in the next dragon fruit season which isn’t too far away.”
Australian and Vietnamese two-way farm trade is currently worth $2.8 billion with Australian agricultural exports to the growing market valued at about $1.5b in 2016-17.
That $1.5b figure comprises $712m in grains, oilseeds and pulses and $242m in feeder and slaughter cattle exports.
But while the market for live cattle increased rapidly from 16,000 head in 2012/13 to 307,000 in 2014/15 and 277,000 the year after, this year’s numbers have fallen to just 161,000.
However, live cattle trade remains a priority, with Vietnamese consumer demand a core aspect of the market reaching its full potential as consumer taste grows, along with continually improved animal welfare standards.
During her Vietnam visit, Senator Ruston also attended the opening of the Thanh Nhan Abattoir and said it was a “genuine example” of Australia’s commitment to mutual prosperity and the best possible outcomes, across the entire supply chain.
She said the abattoir would work in with Meat and Livestock Australia - and Kentmaster provided equipment for the facility - to improve not only animal handling practices and welfare outcomes but commercial results, driven by food demand.
“We’ve got a state of the art - Australian standards - abattoir in southern Vietnam where we’ll train a whole heap of Vietnamese abattoir workers so that they understand firstly good animal handling techniques but also how to maximise the value opportunity,” she said.
“In Vietnam, they don’t seem to differentiate between the high quality cuts so beef is beef and that’s a big issue for them - how do they maximise the opportunity for the cattle?”
Senator Ruston said while Australian live cattle exports peaked in 2015, impacts on Australian conditions and herds meant there fewer cattle were available for export.
She said high prices in the Australian market had also been a “deterrent” and key factor in cattle exports halving in 2016-17.
But once again a lot of the reason for that is because the Vietnamese don’t differentiate and don’t add value to their beef cuts, she said.
“Price is the primary determining factor about cattle – but some of the newer abattoirs and some of the better equipped and more forward thinking ones in Vietnam have realised Australian cattle is so superior to the cattle they’re getting from other countries or compared to their domestic cattle,” she said.
“What we’d like to do and what we’re hoping to do through these training programs is to help them realise the full value of Australian cattle and to continue to grow demand.”
Senator Ruston said the price of beef per kilo in Vietnam - about $6 - was largely the same, regardless of its country of origin, unless sold into restaurants and the like.
“It doesn’t attract a price differential and most of the Australian beef that’s going into restaurants and the higher end of town is actually coming in as boxed, chilled and frozen,” she said.
Agriculture represents 7 per cent of Australian capital invested in Vietnam currently, Senator Ruston said, with 15 projects valued at $115.4m.
“The opportunities are absolutely huge,” she said.
“Vietnam is definitely really open to us being here and they’re very keen to see investment and support so I see a very, very good business relationship building.
“We’re seeing a level of interest from external investors and there’s quite a number of Australians over in Vietnam looking for opportunities for joint ventures.
“The growing conditions here are absolutely fantastic, but they’re just lacking investment know how so I think that’s where the relationship between Australia and Vietnam has the potential to be really strong.”
Since 2006/7 where the value of Australian agricultural exports to Vietnam was $97.5m, it has climbed to a peak of $1.5b in 2015/16 and $1.46b in 2016-17, with the biggest increase, rising $500m occurring from 2012-13 to 2013-14.