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Exporting fruits and vegetables from Vietnam

Updated: Sep 7, 2023

Exporting fruits and vegetables from Vietnam has become a significant part of the country's agricultural sector. Vietnam, with its geographical advantages, fertile land, abundant labor force, favorable climate, and other ecological conditions, possesses a strong foundation for developing a sustainable, diversified, and multi-sectoral agriculture industry. The country is capable of cultivating various high-value agricultural products.


Exporting fruits and vegetables from Vietnam
Exporting fruits and vegetables from Vietnam

Exporting goods contributes to nearly 80% of Vietnam's GDP (2022), with fruit and vegetable exports accounting for only about 2% of the total. However, it is a product category with significant potential. Within the export volume of fruits and vegetables, fruits make up over 70%, followed by vegetables, while processed fruit and vegetable products constitute a very small proportion, less than 10%.


Asia market, particularly China, is the main market for fruit and vegetable exports. Bright spots in the export of fruits and vegetables include the Japanese and South Korean markets, which have seen both value growth and a balanced distribution of product categories. Despite the existing advantages in terms of diversity, favorable natural conditions for production and export, fruit and vegetable exports still face significant challenges. These challenges include an export structure that has not been economically effective, unstable production quantity and quality, technical barriers, and more. To enhance fruit and vegetable exports, it is necessary to implement comprehensive solutions related to products, markets, organization, and export management.


Characteristics of Vietnam's Fruit and Vegetable Products.


Vietnam's fruit and vegetable products are highly diverse, and they can be categorized into fresh, dried, and processed varieties. The export-oriented fruit and vegetable products of Vietnam have the following characteristics:


Characteristics of Vietnam's Fruit and Vegetable Products.
Characteristics of Vietnam's Fruit and Vegetable Products.

Strong influence of natural conditions: Fruit and vegetable products are greatly influenced by natural factors such as soil, climate, topography, and water sources.

  • Seasonal nature products: Production and harvesting are typically carried out according to specific seasonal cycles, for each type of crop and in specific regions, to ensure compatibility with favorable conditions for cultivation, care, and the growth and development of plants. Prices of these products will vary according to the seasonal availability of each type of fruit or vegetable.

  • Distributed and local products: Each different type of crops are suitable for different weather and climatic conditions, resulting in cultivation and development in different regions.

  • Fresh and perishable nature: The majority of fruit and vegetable products are fresh, with only a small portion being processed. Therefore, they are susceptible to damage during harvesting and transportation. Prompt purchasing and swift transportation are necessary.

  • Essential demand: These products serve the essential needs of consumers, and their quality directly impacts human health. Therefore, strict regulations are emphasized throughout the processing procedures to ensure quality.

  • Wide variety: The quality of the items is very different, each type has its own properties, characteristics, and grows in different conditions.


In the context of Vietnam's participation in global economic integration through free trade agreements, export turnover is one of the measures to evaluate the level of integration. In recent years, although fruits and vegetables are not the main export commodities of Vietnam, accounting for 2.5% of the total value of exported goods and less than 2% of the total GDP, the export value of this category has been steadily increasing, indicating positive developments in Vietnam's fruit and vegetable sector.


The group of exported fruits and vegetables can be divided into three main categories:

  • Vegetable group: including tomatoes, cabbages, onions, carrots; fresh or frozen; sliced or diced vegetables, etc.

  • Fruit group: including bananas, grapes, citrus fruits, dragon fruits; fresh, dried, or frozen fruits, etc.

Processed fruits and vegetables: deeply processed products such as pickled vegetables, fruit juices, crushed fruits.Currently, there are 153 fruit and vegetable processing facilities throughout the country, while more than 30 million tons of fruit and vegetable products need to be processed annually. Therefore, there is a need to increase investment in standardized processing plants and closed-loop supply chains to enhance the added value of agricultural products, and to meet the consumption trends of the global market. (Source: Ministry of Agriculture and Rural Development).


Among the processed fruit and vegetable export products, the leading item is passion fruit with an export turnover of 135 million USD in the past year, an increase of 78% compared to 2021; followed by coconuts with 122 million USD, a 4.5% increase; cashew nuts with 90 million USD, a nearly 28% increase; pineapples with 53 million USD; and processed fruits with 100 million USD...


Structure of the Fruit and Vegetable Export Market.


China consistently leads in both the export value and the growth rate of Vietnam's fruit and vegetable export market. In 2020, Vietnam's fruit and vegetable export value reached nearly $3.27 billion, a decrease of 12.7% compared to 2019.

China remains the main market for Vietnamese fruit and vegetable exports, accounting for over 56% of the total export value, reaching nearly $1.84 billion, a decrease of 25.7% compared to 2019.

The second and third largest export markets are the United States and the Netherlands, which are traditional export markets for Vietnam. The majority of the export value to these markets consists of fruit products.


Successes, Challenges, Opportunities, and Threats in Vietnam's Fruit and Vegetable Export.


Successes:

Vietnam offers a diverse range of fruits and vegetables, including dragon fruit, mangoes, lychees, bananas, and various leafy greens. This wide selection allows for a year-round export market and caters to the preferences of different countries. In particular, initially exporting more types of results to some new and promising markets. The Ministry of Agriculture and Rural Development, in collaboration with export units, has made efforts to expand many new fruit products such as: exporting rambutan to the US market; lychee to Australian school, mango to Japanese school.


Besides, there are many disadvantages such as:

  • The proportion of fruit and vegetable exports in commodity export turnover is low.

  • Vegetable exports are still largely dependent on traditional markets such as China and the US, leading to great risks.

Successes, Challenges, Opportunities, and Threats in Vietnam's Fruit and Vegetable Export
Successes, Challenges, Opportunities, and Threats in Vietnam's Fruit and Vegetable Export

Many opportunities in fruit and vegetable exports:


From the characteristics of fruit and vegetable exports and Vietnam's fruit and vegetable farming industry, several opportunities can be identified in fruit and vegetable exports.

  • Diverse range of products: Vietnam offers a wide variety of fruits and vegetables, including unique local varieties such as Dien pomelo, Ninh Thuan grapes, Hoa Loc mangoes, Thanh Ha litchis, and Luc Ngan lychees. This is a significant advantage for Vietnam's fruit and vegetable exports, as it allows for market expansion and meets the diverse consumer demands.

  • Favorable natural conditions: Vietnam benefits from favorable climate conditions and a geographically advantageous position for participating in fruit and vegetable exports. These conditions contribute to the development of the fruit and vegetable industry.

  • Transition to safe production and export: There has been an initial shift in production and export models for fruits and vegetables. Some households, cooperatives, and businesses have boldly adopted safe production models that adhere to international standards and participate in value chain linkages for fruit and vegetable exports. This approach brings about high and stable economic efficiency.

Overall, these opportunities provide a solid foundation for Vietnam to further develop and strengthen its fruit and vegetable export sector.


Accompanying the opportunities in Vietnam's fruit and vegetable exports are significant and challenging obstacles:


Unstable production volume: The main reason for this instability is fragmented and small-scale individual production, with few specialized cultivation areas. Inconsistent farming plans among farmers lead to fluctuations in the variety and volume of production. Additionally, the harvesting, transportation, and storage processes still lack quality control, resulting in lower quality of exported fruits and vegetables.


High export costs and non-competitive prices: This challenge applies not only to fruit and vegetable exports but also to other export businesses. Fruits and vegetables, being perishable, require high-quality preservation techniques. While exporting via sea freight reduces costs, the longer transportation time can affect product quality. As a result, Vietnam's fruit and vegetable prices are often much higher than those of countries like Thailand and the Philippines.


These challenges pose significant hurdles for fruit and vegetable exporters in Vietnam and need to be addressed to enhance the sectors competitiveness and sustainability.


Accompanying the opportunities in Vietnam's fruit and vegetable exports are significant and challenging obstacles
Accompanying the opportunities in Vietnam's fruit and vegetable exports are significant and challenging obstacles

Solutions to Enhance Exporting in Vietnam.


Vietnam has made significant strides in the export industry, particularly in sectors such as fruits and vegetables. However, there are still opportunities to further boost the country's export potential.


Strengthening Quality Control and Compliance.

To gain a competitive edge in international markets, Vietnam should focus on strengthening quality control and compliance measures. Implementing stringent quality standards and ensuring strict adherence to international regulations will help build trust and confidence among importers. This includes regular inspections, certifications, and audits to verify the quality and safety of exported products.


Promoting Branding and Product Differentiation.

Building strong brands and promoting product differentiation is crucial for Vietnamese exporters. By establishing a distinct brand identity and highlighting the unique characteristics of their products, exporters can attract and retain customers in competitive markets. This can be achieved through effective marketing campaigns, packaging innovations, and showcasing the cultural heritage associated with Vietnamese produce.


Developing Cold Chain Infrastructure.

Investing in a robust cold chain infrastructure is essential for the export of perishable goods like fruits and vegetables. Maintaining optimal temperature and humidity levels throughout the supply chain is crucial to ensure product freshness and quality. Vietnam should focus on building modern cold storage facilities, improving transportation logistics, and training personnel in cold chain management.


Enhancing Supply Chain Efficiency.

Efficiency in the supply chain is vital for the success of export operations. Vietnam should focus on improving logistics, reducing transportation costs, and enhancing coordination among stakeholders. This includes optimizing port operations, streamlining customs procedures, and implementing advanced tracking and traceability systems to ensure timely delivery and minimize disruptions.


Investing in Research and Development.

Continuous investment in research and development (R&D) is crucial for innovation and product improvement. Vietnam should allocate resources to R&D activities aimed at enhancing the quality, taste, and nutritional value of its fruits and vegetables. This will enable Vietnamese exporters to offer high-value products that meet the evolving demands of global consumers.


Solutions to Enhance Exporting in Vietnam
Solutions to Enhance Exporting in Vietnam
Vietnam can further strengthen its position in the global export market and capitalize on the growing demand for high-quality fruits and vegetables. With a strategic and proactive approach, Vietnam has the potential to become a leading exporter in the industry, benefiting both the economy and the agricultural sector.

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