Fruit and vegetable exports face difficulties in China

After four consecutive months of decline, fruit and vegetable exports in September 2021 increased. Notably, the deceleration of fruit and vegetable exports to the Chinese market has had a significant impact on fruit and vegetable exports in general.

Promoting exports to markets such as the EU, US, Japan instead of focusing too much on the Chinese market is a very important direction to export vegetables and fruits more sustainably. Photo: Nguyen Hien

Exports to China plummeted

According to the latest information from the Import-Export Department (Ministry of Industry and Trade), the export value of vegetables and fruits in September 2021 reached US$250 million, up 9.2% compared to August 2021 and up 5.2% compared to September 2020. In the first nine months of 2021, the export value of vegetables and fruits is estimated at US$2.77 billion, up 11.1% over the same period in 2020.

The development trend of fruit and vegetable export turnover since the beginning of the year shows an increase in the first four months of the year, the turnover has gone down from May to August.

"Due to the impact of the Covid-19 pandemic, Vietnam has to apply the strongest preventive measures, causing the production and circulation of goods to be blocked, and the supply chain broken. This is the main reason why vegetables and fruits exports decreased continuously," a representative of the Import-Export Department said.

Talking to Customs News about the fruit and vegetable exports increasing again in September 2021, Mr. Dang Phuc Nguyen, General Secretary of the Vietnam Fruit and Vegetable Association, said: "Problems of inter-regional and inter-provincial transport began to be solved, which is a factor that positively affects the situation of fruit and vegetable exports.”

In August 2021, the export of vegetables and fruits to the Chinese market decreased sharply. China has temporarily stopped importing dragon fruits at Hekou and Thien Bao border gates in Yunnan province, causing a sharp drop in domestic dragon fruit prices. The reason given by the Chinese side is that Vietnamese goods are suspected of being infected with SARS-CoV-2.

“In general, in the first eight months of 2021, the trend of fruit and vegetable exports to the Chinese market decelerated the fastest compared to other markets. China is Vietnam's main export market for fruit and vegetables. Therefore, the sharp increase in exports to other markets such as the US, Japan, Russia, Australia has not yet offset the decrease in exports to the Chinese market," a representative of the Import-Export Department said.

Deputy Minister of Agriculture and Rural Development Phung Duc Tien said that recently, the Chinese side announced that dragon fruits exported from Vietnam were found to have the SARS-CoV-2 virus on the packaging, specifically shipments from Binh Thuan province.

However, Binh Thuan province has also established an inspection team to clarify whether the shipments of dragon fruit have the SARS-CoV-2 virus as announced by the Chinese side. The World Health Organization (WHO), the Food and Agriculture Organization of the United Nations (FAO) have stated that there is no evidence that the SARS-CoV-2 virus is transmitted through packaging of agricultural products and food, said the leader of the Ministry of Agriculture and Rural Development.

Reaching target of US$3.5 billion

Regarding why China temporarily stopped importing Vietnamese dragon fruit due to the detection of SARS-CoV-2 virus on the packaging, Mr. Dang Phuc Nguyen said that this is not the root cause. The reason is China wants to tighten the quarantine and protect domestic goods. For example, with dragon fruit, in 2018 China planted an area of about 10,000 hectares. In recent years, the area of dragon fruit in China has doubled each year, now it has reached about 40,000-50,000 ha.

“In 2019, 2020, Vietnam's fruit and vegetable exports to China accounted for about 70% of the total fruit and vegetable export turnover, but this year this figure is only 58%. In the future, the proportion of fruit and vegetable exports to the Chinese market in the total export turnover may decrease further," said Mr. Dang Phuc Nguyen.

Making good use of opportunities from Free Trade Agreements (FTAs) to expand and boost exports to other markets such as the EU, the US, Japan is an important direction for making the export of vegetables and fruits more sustainable and less dependent on the Chinese market.

The General Secretary of the Vietnam Fruit and Vegetable Association said that the problem of Vietnam's fruit and vegetable industry today is that few goods are grown according to the standards of the US, Japan, and EU markets. Each market has its own regulations and standards on goods, it is not possible to take capital to focus on exporting to China and then immediately redirecting exports to the US, EU, Japan, etc.

To increase the export of vegetables and fruits to markets other than China, first, it is necessary to have a strategy to increase the planting area to meet the requirements of each market. Enterprises need to pay more attention to research on market tastes in combination with changes in cultivation, preservation and processing technology.

“For example, the Chinese market likes to buy whole products, while the EU market likes to have to them split and process them more deeply. Chinese partners can buy a bunch of bananas, but when exporting to the US, the EU has to split a few fruits and pack them together to be able to export; or Chinese durians often buy whole fruits, but other markets like to split the segments Enterprises must pay special attention to all factors," said Mr. Dang Phuc Nguyen.

Regarding the export of vegetables and fruits from now until the end of the year, Mr. Dang Phuc Nguyen said that it is not too optimistic because during the time of prolonged social distancing in many southern provinces and cities, many businesses have had to temporarily close their factories.

Up to now, when businesses reopened, they faced a labor shortage, reducing the factory's capacity.

The total export value of vegetables and fruits for the whole year is expected to increase by about 10% over the previous year, reaching about US$3.4-3.5 billion.