Vietnam farm exporters face irreversible shift as buyers tighten ESG, traceability rules: exec

Vietnamese agricultural exporters are facing an irreversible shift as global buyers impose stricter sustainability and traceability requirements, forcing producers to rethink business models long built primarily on low costs, an industry executive said.

Speaking at a conference in Hanoi on Tuesday, Nguyen Duc Hung Linh, deputy chief executive of the investment division at AgriS, one of Vietnam’s leading high-tech agriculture companies, said Vietnamese exporters can no longer rely on low prices to compete with major agricultural producers such as Thailand and Brazil.

“The most significant changes from international markets affecting Vietnamese goods are ESG standards and traceability requirements,” Linh said, adding that these factors have become decisive for maintaining competitiveness across industries, not just agriculture.

While ESG momentum has slowed in some markets, including the United States amid policy shifts, Linh said the global trajectory remains intact, particularly in Europe, where governments and regulators continue to strengthen sustainability frameworks. “This is a long-term trend that cannot be reversed in the short term,” he stressed.

Meeting ESG requirements involves high costs and long timelines. Linh noted that companies typically need at least three to five years to achieve even basic compliance, as the transition requires heavy investment in technology, management systems, advisory services and staff training, along with strong commitment from senior management.

One of the most immediate pressures, he said, is the speed at which exporters must respond to data requests from overseas buyers. European importers may require full documentation and original production records within hours.

“If a company cannot provide data immediately, it shows the system is not operating effectively or is not yet ready,” Linh said, noting that end-to-end digitalization and modern management platforms are becoming essential.

He added that competitive pressure could further tighten requirements, with response times potentially reduced to one hour or buyers given direct access to data platforms rather than relying on intermediaries.

To address structural challenges such as large-scale production with thin margins, Linh outlined two strategic paths. The first is to move up the value chain by focusing on higher value-added and premium products. The second is to expand production overseas as domestic agricultural land becomes increasingly constrained.

“Exporting should not be understood only as producing in Vietnam and selling abroad,” Linh said. “It also means establishing production bases directly in foreign markets.”

Indonesia, with a population of about 281 million and relatively underdeveloped agricultural processing capacity, offers significant opportunities for Vietnamese firms that can meet international standards on quality, ESG, and traceability, he suggested.