Fruits of labor

Photo: Viet Tuan

The bar is high, but fruit and vegetable exports are an area of particular potential for Vietnam.

After nine years of negotiations, good news came to Vietnam’s agriculture sector in September when dragon fruit hit shelves in Australia, making the country the first to be licensed to export fresh dragon fruit to the stringent market. It represented a milestone in local dragon fruit conquering the world. The 600 boxes of about three tons exported to Australia were grown in the Mekong Delta’s Long An province. Growing the fruit has brought a better life to many farmers in the Delta region, with average revenue per hectare reaching VND200 million ($8,800) from a bumper crop. The Australian success is expected to open up a wider path for Vietnamese fruit entering foreign markets in the years to come. 

Important milestone 

Dragon fruit is one of Vietnam’s key export fruits and recorded export sales of $895.7 million in 2016, accounting for 50.3 per cent of the country’s total fresh fruit exports and 36.1 per cent of total fruit and vegetable exports. Australian’s quickly took a liking to the fruit. According to Australian Ambassador to Vietnam, H.E. Craig Chittick, Australians love tropical fruit but most would be unfamiliar with dragon fruit. “With imports from Vietnam, more Australians will have the chance to try dragon fruit for the first time,” he said. “I’m sure that once they taste it, they will grow to love it.” 

The exports to Australia took nine years of negotiations. Ambassador Chittick said that prior to any imports commencing, Australia completes a risk assessment to identify any pest or disease risks and the steps needed to manage such risks. The risk assessment for Vietnam’s dragon fruit commenced in April 2016 and was completed in January 2017.

According to Mr. Nguyen Khac Huy, CEO of the Hoang Phat Co., which exports dragon fruit to Australia, exporters must also have a valid license issued by the Australian Department of Agriculture and Water Resources as well as a certificate from Vietnam’s Plant Protection Department (PPD) confirming there are no insect infections. The fresh dragon fruit must originate in and be exported from Vietnam, in accordance with relevant conditions and programs. Prior to shipment, the fruit must undergo vapor heat treatment (VHT) for 40 minutes at 46.5C at a minimum of 90 per cent humidity at a processing facility approved by the PPD. 

He added that air transport pushes up costs but because this is the initial introduction of dragon fruit in Australia he wanted shipments to arrive quickly to ensure quality. “Later dragon fruit batches will be transported to Australia by sea to reduce costs,” he said. “It can retain its freshness from 25 to 35 days.”

If their quality meets Australian standards, Vietnamese businesses will have many opportunities to export other fruit in particular and agricultural products in general to Australia in the future. Ambassador Chittick believes that Australian consumers are keen to taste different varieties. “Both Vietnam and Australia produce tropical fruit,” he said. “Australia produces large quantities of mangoes, which are consumed domestically and also exported to many countries. Vietnam produces different varieties to those available in Australia, so imports from Vietnam mean there is a greater choice available to consumers.” 

Enhancing the Vietnamese brand

The efforts of Hoang Phat to export Vietnamese dragon fruit to Australia represents the endless efforts of many businesses to build a Vietnamese fruit brand in foreign countries. Bananas were exported to Japan early this year after six months of negotiations, making it one of the first to gain access to the market. Mr. Vo Quang Thuan, CEO of Huy Long An Ltd, one of the country’s largest fruit exporters, said that in addition to Japan, bananas have recently gained market entry into South Korea and Dubai. 

According to Mr. Huy, in order to adapt to the stringent requirements of difficult markets, Hoang Phat had to change and upgrade its production lines. Its orchards have an automated pulley system to deliver fruit to the warehouse and modern irrigation systems. “Bananas have about 27 components in the care process, which require thorough training of farmers to ensure the fruit are produced in the right way,” he said. 

Many businesses have cooperated with farmers to build a Vietnamese agricultural product brand internationally. The Ministry of Agriculture and Rural Development (MARD) is now compiling a decree to replace Decision No. 80 on linking and consuming products. In particular, enterprises will be granted land use right certificates and a 50 per cent reduction on land use costs if they build factories, workshops, and processing zones. The State will also cover the cost of consultancy, surveys, assessments, and quality control. 

However, Mr. Hoang Trong Thuy, an expert in agriculture, said it takes at least VND500 billion ($22 million) to develop a fruit producing and exporting enterprise. With this level of investment, there would be very few enterprises with sufficient capital to do so. A host of other difficulties may also see investors baulk at the idea of fruit production. 

But with the efforts of the agriculture sector and the State, export turnover in recent years has seen growth of 30-40 per cent. Vietnam earned $294 million from the export of fruit and vegetables in September and $2.6 billion in the first nine months of the year, an increase of 44.2 per cent year-on-year, according to the General Department of Vietnam Customs. Vietnam’s fruit and vegetables are now available in 60 countries around the world, including difficult markets such as the US, Japan, South Korea, and Singapore. 

In Singapore, products such as pear, grapefruit, watermelon, pumpkin, dragon fruit, and sweet potato have reached consumers through large local supermarkets. According to Mr. Jeffrey Yu, Singapore Merchandise Director (Fresh) at Giant Singapore, the company is looking for more Vietnamese fruit and vegetables and recognizes many business opportunities with Vietnamese brands.