Vietnam still fumbles for way to bring fruit to global market

High transportation, packaging and radiation fees all are pushing up prices of fruit, weakening the competitiveness of Vietnam’s fruit in the world market.

Vietnam is a big fruit exporter

According to the General Department of Customs (GDC), Vietnam’s vegetable and fruit exports in May brought $303.1 million, an increase of 10 percent over the same period last year.

Among agriculture products, vegetables and fruits are the second largest export item just to seafood. However, analysts believe that Vietnam still can expect higher export turnover, because Vietnam’s fruits are delicious, but account for only one percent of world market share.

The US Ambassador to Vietnam Daniel J. Kritenbrink, after enjoying Hoa Loc mango from the Can Tho City People’s Committee, said it was the most delicious mango he had ever eaten. He also finds Vietnam’s starapple ‘wonderful’.

Among agriculture products, vegetables and fruits are the second largest export item just to seafood. However, analysts believe that Vietnam still can expect higher export turnover, because Vietnam’s fruits are delicious, but account for only one percent of world market share.

According to the Import/Export Department of the Ministry of Industry and Trade (MOIT), Vietnam’s major fruit export items include dragon fruit, mango, longan, durian and watermelon, while Vietnam’s target markets include China, Japan, the US and South Korea. Vietnam’s fruits also reach Malaysia, Thailand and the EU.

The EU is a potential market with high demand, 70-80 million tons a year. However, Vietnam’s exports to the market remain modest. Though exports to the EU grew steadily by 10 percent per annum in 2011-2017, Vietnam only accounts for 0.4 percent of the EU market share.

As for the US, six kinds of fruits have visas to the market, but the export volume remains insignificant, accounting for 3 percent of market share. Vietnam’s products are less competitive than other rivals in the region.

Commenting about competitiveness, Nguyen Dinh Tung, general director of Vina T&T group, one of the biggest exporters, said the problem lies in the high radiation cost because of the exclusive business. The high air transportation costs also burden enterprises.

According to Tung, the radiation, packaging and transportation fees all amount to 50 percent of the production cost of Vietnam’s fruits.

MOIT admitted that Vietnam’s vegetables and fruits are still facing a lot of problems, including scattered production, high loss rate, high production cost, and the lack of high technologies for processing and preservation. 

Meanwhile, Vietnam has to compete fiercely with other regional rivals, including Thailand, Indonesia and Myanmar in target markets.

In general, the procedures to open foreign markets for Vietnam’s fruits are complicated. It takes five to eight years on average to obtain the rights to enter a market.

MOIT urged exporters to take full advantage of e-commerce to boost exports.