Vietnam’s fruit future: Officials urge domestic focus despite soaring export volumes

25-Oct-2018 - Last updated on 25-Oct-2018 at 01:23 GMT

Vietnam’s fruit and vegetable exports reached the VND 63.5tn (US$2.7bn) mark as of September 2018, up 14.1% year-on-year. ©Getty Images

Vietnam’s fruit and vegetable exports reached the VND 63.5tn (US$2.7bn) mark as of September 2018, up 14.1% year-on-year, but officials are concerned that more needs to be done to improve sales to domestic consumers.

Exports are expected to exceed VND94 tn (US 4bn) by the end of the year, with growth being attributed to closer trading ties with China.

Despite this healthy growth in exports, Ministry of Agriculture and Rural Development (MARD) officials are recommending that Vietnam firms focus on the domestic market for fruits instead of the export one.

Plant Cultivation Department (also located within MARD) deputy general director Nguyen Nhu Cuong told local media that: “Vietnam’s fruit sector should focus on gaining trust from domestic consumers before focusing on exports”.

“[High] quality fruit products that are well consumed domestically will lay a credible foundation for the exports in the future.”

The Vietnam-China connection

China is Vietnam’s largest importer for fruit and vegetables, making up 74% of market share valued at VND 4 tn (US$ 1.7 bn).

Vietnam and China have a close trade relationship, so much so that China’s General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) gave approval for four new ports on the China-Vietnam border for fruit imports back in 2017.

This was in addition to the seven ports designated to Vietnam located in Guangxi, China.

Small-scale cross-border trade is the main channel by which Vietnamese fruits and vegetable produce enters China – this made up VND42.3tn (US$1.8bn) in 2017, as compared to VND22.5tn (US$956m) via normal trade.

This is a result of the looser criteria required of cross-border trade, including lower taxes, faster transport and higher transaction flexibility.

The main fruit players

Of the various fresh produce that Vietnam exports, dragon fruits topped the list, especially when exporting to the Chinese market.

The General Department of Vietnam Customs has released data stating that dragon fruit alone made up 32% of total Vietnamese vegetables and fruits exports.

Its export value as of April 2018 reached VND10tn (US$427m), which outstripped its two closest fruit competitors by almost four times. It also far outperformed vegetable exports, valued at VND3.4tn (US$ 143.8mn).

China alone imported 533,000 tons of dragon fruit in 2017.

The number two spot went to longan, with its export value standing at VND2.8tn (US$ 121m), followed by mangoes at VND2.4tn (US$ 104m).

Vietnam and the New Zealand fruit market

Vietnam was granted license to enter the New Zealand market for rambutan earlier this year. It is the first ever country to export fresh rambutan into New Zealand, as per the New Zealand Ministry of Primary Industries.

Only three types of Vietnamese fruits have obtained market access to New Zealand so far: Mango in 2011, dragon fruit in 2014, and now rambutan.

“If it can make it into one of the pickiest markets in the world, it can make it to anywhere else,” said Vietnam Deputy Minister of Agriculture and Rural Development Le Quoc Doanh to VIR.