The decline in Vietnamese dragon fruit exports over the past few years has posed a significant challenge to the nation's position in the international market. Amid increasing competition from countries like Mexico, China, and India, Vietnam's dragon fruit exports face obstacles ranging from stringent quality standards to market dominance by other players. This article delves into the reasons behind the gradual erosion of Vietnamese dragon fruit's export dominance and explores the challenges that the industry currently encounters.
Competition and Eroding Market Share:
Vietnamese dragon fruit exports have encountered consecutive challenges, leading to a decline in market share over the past three years. Countries like Mexico have gained footholds in markets such as the United States and Canada, while China and India dominate the global supply chain. This shifting landscape has impacted Vietnam's position in the international dragon fruit export market.
Stringent Export Standards:
A Hurdle to Overcome: Exporting dragon fruit is becoming increasingly complex due to stringent quality standards. Notably, meeting the requirements for exporting to countries like Japan and South Korea has become particularly challenging. These markets demand higher quality and specific criteria, resulting in limited export opportunities with only a few containers per month.
Vietnamese Dragon Fruit's Global Reach:
Despite the challenges, Vietnamese dragon fruit has managed to penetrate over 15 countries and territories, showcasing its persistent global reach. The fruit has expanded its presence beyond traditional markets such as China, Thailand, and Malaysia, venturing into more demanding markets including the United States, Japan, South Korea, New Zealand, and Australia.
Decline in Export Figures:
A Shift from Dominance: In the past, Vietnamese dragon fruit enjoyed a virtual monopoly in the international market, accounting for 80-90% of global trade. However, recent years have seen a decline in exports. In 2021, the export value dropped by nearly 39% compared to the previous year and over 49% from its peak in 2019. Although the first two months of the current year saw improved export activities, data from the Ministry of Industry and Trade shows a 26.9% decline in dragon fruit exports compared to the same period in the previous year.
Unraveling the Decline in Vietnamese Dragon Fruit Exports.
Growing Competition in Dragon Fruit Production: The significant decrease in dragon fruit export volume can be attributed to the intensifying competition in global dragon fruit production. Multiple countries have entered the market, leading to increased rivalry and a consequent decline in Vietnam's export share.
China's Dominance in Production: China, in particular, has transformed into a dragon fruit production powerhouse, surpassing Vietnam's output by 200,000 tons in a single year. By achieving a production volume of 1.6 million tons, China has positioned itself as the world leader in dragon fruit production. China's impressive production capabilities nearly meet the country's annual demand of approximately 2 million tons.
India's Growing Role: India has also made strides in dragon fruit cultivation. Recently, the Indian government announced plans to expand dragon fruit cultivation from 3,000 hectares to 50,000 hectares within five years. This ambitious initiative signifies India's intent to make its mark on the global dragon fruit market, further contributing to Vietnam's export challenges.
Mexico's Entry and Impact: Mexico has also ventured into dragon fruit cultivation, affecting Vietnam's export market to the United States and Canada. In the early 2010s, Vietnam's dragon fruit exports to the US and Canada thrived. However, Mexico's successful cultivation has since altered the dynamics, limiting Vietnam's market share in North America.
Future Projections and Challenges: Anticipations from businesses within the industry forecast a continued decline in dragon fruit exports. In the coming years, price increases for the commodity could prove challenging due to substantial production outputs from India and China flooding the market. This influx may lead to the risk of reverse imports from competitor nations to Vietnam, given the potentially more affordable prices they offer.
Sustainable Solutions to Revitalize Vietnamese Dragon Fruit Exports.
In the context of China and India's escalating competition in dragon fruit production, Mr. Dang Phuc Nguyen, the Secretary-General of the Vietnam Fruit and Vegetable Association (Vinafruit), suggests that Vietnamese farmers and businesses need to reevaluate the market to leverage their advantages.
Beyond focusing on quality and product design, farmers should carefully consider the timing of cultivation. Rather than mass planting as before, there should be an emphasis on increasing off-season harvests—a period that China and India are unable to capitalize on. China's extended winter season makes dragon fruit cultivation challenging. Consequently, Vietnamese farmers should intensify dragon fruit cultivation for harvest at the beginning and end of the year when the supply from competitor countries is scarce, and sometimes even unavailable.
Additionally, to reduce dependence on specific markets, businesses should prioritize deep processing.
The decline in Vietnamese dragon fruit exports is a multi-dimensional challenge rooted in heightened global competition. China's ascendancy, India's ambitious plans, and Mexico's entry have transformed the landscape, necessitating strategic reevaluation by Vietnamese exporters. Navigating this challenging terrain will require innovation, quality enhancement, and exploring avenues to retain and regain the industry's competitive edge in the evolving global market.