Vietnams fruits - entangled in tricky situations

The existing problems include small-scale and dispersed raw material areas, competition of similar products in the international market, etc.

The biggest problem at the moment for agro-products, especially Vietnamese fruits, is that the crop’s season is too short and the planting area lacks concentration and stability. Photo: Tung Dinh.

Insufficient raw material supply for processing facilities

Stating his opinion at the Forum “Connect Production and Consumption of Agricultural Products and OCOP Products in the Central Highlands in 2021” recently organized by the MARD, Mr. Dinh Cao Khue, Chairman of the Board of Directors of Dong Giao Foodstuff Export JSC (DOVECO) said that one of the big problems that Vietnam's agro-product processing industry have to face is the raw material area.

Mr. Dinh Cao Khue raised the issue: “The quality of Vietnam's raw materials is very good, but the production time is too short considering the period of one year. For example, Son La mango is only available for three months, and it is only two months in the case of Bac Giang lychee. But a processing factory needs to operate for at least 10 months a year.

“It can be seen from the current general situation that the supply from raw material areas is insufficient for a processing factory to ensure operating capacity in a year."

In order to completely solve this problem and build stable, sufficient and suitable raw material areas for each region, Mr. Dinh Cao Khue said that Vietnam needs fundamental planning. A processing facility needs to acquire the ability to process a variety of raw materials so that the enterprise can make the most of its capacity and the machinery line can operate all year round.

Central Highlands - “the promised land”

The DOVECO representative stated that there are two reasons to say that the Central Highlands is “the promised land” for the development of fruit trees.

The first reason is that the Central Highlands soil quality is good, the day-night temperature difference has great balance. The land is blessed with long sunny daytime and a night temperature not as cold as in the North. Such a favorable climate will improve productivity and enhance the fruit’s competitiveness in the international market.

The second reason is that the Central Highlands is not affected by storms, only lacks water in the dry season. This problem can be overcome by improving irrigation and drainage.

“Most of the favorable land plots in the Central Highlands are owned by agro-companies and state-owned agroforestry farms. The need for smooth coordination between processing units and these companies to both bring profits to businesses and increase incomes for people should be put into consideration. Rubber companies do not necessarily make rubber only. They need a wider vision, making a reasonable transition based on the market situation," said Mr. Khue.

Issues concerning Vietnamese fruit’s competitiveness

Vietnam is gradually integrating deeply into the international market and participating in the world's food distribution chain. Export and processing enterprises must ensure the criteria and standards of those markets. It is also necessary to grasp the information about competitors in the same market.

In Mr. Khue’s opinion, today's market requirements are not too difficult, the question is whether the price and quality can be guaranteed. The product will it will certainly attract a lot of customers as long as it is produced according to their tastes and has a cheap price. If we only develop in a general way, lacks flexibility and creativity, the product can only be consumed domestically, not fit for export.”

“Foreign agro-product associations have great functions, possess enough information to harmonize supply and demand, ensuring the interests of businesses. On the other hand, Vietnam's industry associations still possess many limitations, making it difficult to provide sufficient information to businesses," said Mr. Khue.

The DOVECO representative proposed that policy and strategic units need to help businesses orient the market to avoid the phenomenon of excess and shortage of products. There should also be improvements in the matter of plant varieties. The current situation calls for research institutes and scientists to work together with businesses to select and create new high-quality varieties.

Agricultural enterprises’ two major issues

Sharing about the difficulties of businesses in general and agricultural enterprises in particular, Mr. Dinh Cao Khue said that there are currently two major issues: transportation and human resources.

“Vietnam's agro-product exports to the EU are now very favorable thanks to the EVFTA. However, the biggest difficulty lies in transportation costs. The costs at domestic seaports need to be reconsidered," said Mr. Khue.

Reality also shows that processing factories are located far from the city area, resulting in a shortage of quality human resources. DOVECO's Chairman of the Board of Directors said that it is not that there is no labor source but it is the local human resources that cannot meet the requirements of enterprises.