Market Demand Forecasts

FORECASTS ON MARKET DEMAND FOR SOME REGION’S MAIN AGRO-PRODUCTS

Assessment of consumption market demands is the foremost important factor for working out development directions, production structure transformation thus bringing about high and stable economic efficiency. Market demands for the region’s agro-products that have high value and potential for development are as follows:

1. Coffee: In the late months of 2002, coffee price in the world shows a recovery. That is a good signal for producers and exporters. At present, the world coffee output exceeds demand. The common trend is that, the consumption of Robusta coffee may decline or slowly increase. On the contrary, the average annual Arabica coffee consumption growth rate will be 3 - 3,5% in the coming years. It is forecasted that the world coffee consumption demand will rise up at an average rate by 1 – 1.3% per annum. However, coffee market has been developed in a complicated manner with unstable price. As a result, the accession to the Association for Coffee Planting Countries (ACPC) and formulation of long-term coffee development strategy are very necessary.

2. Rubber: As many other agro-products, rubber supply surplus in the market resulted in a slump in the price of this strategic export. Rubber export and import in the world market are presently at the balance (from 4,500 – 4,800 thousand tones/year). The biggest rubber market in the region is China. The fact that Malaysia, a large rubber exporter in the region, has the strategy to expand its rubber-growing area will result in a fiercer competition in rubber export. In general, the export price of Vietnam’s and Cambodia’s rubber is about 7 - 8% lower than the same category of rubber by Thailand and Malaysia due to limited quantity, product structure and customers. However, the Triangle has the advantage in price thanks to its favourable land conditions and cheaper labour costs. The important factors for developing rubber are to establish stable markets, maintain and expand existing markets and proceed with re-penetration into the previously established markets in Russia and Eastern European countries.

3. Cashew nut: Vietnam’s main cashew nut markets at present are North America, Europe, Asia, Australia and especially almost all China’s market. Vietnam is one of 50 countries that have a large cashew nut output. Vietnam’s cashew nut bean has been rated of good quality and preferred by the markets. It has been of high competitiveness thanks to its low investments in planting and exploiting and its processing technology that is of higher efficiency than African countries and India. With its land potential and climate suitable to cashew nut as well as market potential and competitiveness, cashew-nut trees in the Triangle have favourable conditions for developing. However, it requires investment plans for grown area expansion to supply more materials to the existing and newly established processing establishments in the concentrated material areas like Rattanakiri and others.

4. Pepper: Over the past time, pepper has enjoyed a good price, and therefore people in the Central Highlands have spontaneously planted pepper in a large area. However, assessments indicate that the world pepper demand is limited at about 210 - 220 thousand tones. As a result, pepper market in the future would still be available but it is necessary to develop production in a rational manner so as to avoid the situation that surplus products find no consuming market.

5. Cocoa: Supply shortage is prevailing in the world cocoa market (demand surpasses supply). ICCO’s forecast indicates that the annual average cocoa consumption demand growth rate is about 5 - 7%. The Development Triangle has potential for developing cocoa to a cash crop. However, it is necessary to have stable and firm strategy to gradually grasp the markets.

6. Cotton: Vietnam’s cotton output currently can meet only about 10% of the textile industry’s demand. Its annual average growth rate is about 14% and therefore fine-cotton market is still very large and stable in the long term. In addition, cotton demand in other countries in the region remains relatively great, especially in China and some other Southeast Asian countries.

In summary, the Triangle possesses a large number of agro-products of high economic value and competitiveness in the markets like rubber, cashew nut, coffee, and pepper. With the current international economic integration tendency, development of agro-exports is the Triangle’s right and proper trend. However, continuously looking for and expanding markets, improving product quality and lowering production costs to raise competitiveness as well as identifying product structure, product categories and formulating proper development plan are of great necessity for territorial areas in each nation of the region.

Source: clv-triangle.vn

-------------------------------------------------------------------------------------------------