Fruit exports are experiencing strong growth.
In early May, a shipment of 5 tons of Ri6 durian, imported officially by TT Meridian Ltd (UK), was distributed to supermarkets in the UK.
Mr. Nguyen Canh Cuong, Commercial Counselor of the Vietnamese Embassy in the UK, stated that the superior quality of Ri6 durian, coupled with the preferential import tax exemption under the UK-Vietnam Free Trade Agreement (UKVFTA), has given Vietnamese durian a competitive advantage in the UK market compared to durian from other countries. Specifically, Vietnamese durian enjoys a preferential tax rate of 0%, while other countries pay 8%. As a result, in addition to durian, many Vietnamese products have a significant competitive advantage in the UK market compared to similar products from countries without an FTA with the UK, such as China, India, Pakistan, Thailand, Malaysia, Indonesia, and South American countries.
Fruit exporters are striving to expand their markets but remain heavily dependent on China.
Besides durian, Dien Yen Thuy pomelo ( Hoa Binh province ) was previously exported officially with a volume of 11 tons and was sold for the first time at the Longdan supermarket chain (UK), receiving a warm welcome from the Vietnamese community as well as local consumers. At the same time, more than 5 tons of Tan Lac red pomelo from Fusa Joint Stock Company (Hoa Binh province) also arrived in the UK for the first time through official import channels of the Longdan group.
According to data from the General Department of Customs, fruit export markets are experiencing strong growth compared to the same period in Q1 2022, such as: South Korea reaching $47 million, up 13%; Japan reaching $40 million, up 11%; the Netherlands reaching $32 million, up 91%; the UAE up 23%; and Malaysia up 36%.
Mr. Dang Phuc Nguyen, General Secretary of the Vietnam Fruit and Vegetable Association, commented: "We often talk about Thai fruits 'flooding' the Vietnamese market, however, if we look at the customs figures, we will see the opposite. In the first three months of this year, we only imported from them a certain amount."
"US$8.4 million, mainly consisting of products like rambutan, mangosteen, durian, tamarind… But conversely, we exported US$22.5 million to them. This shows that Vietnamese fruits and vegetables are still competing well with Thai products right in their own backyard."
Despite growth in demanding global markets, Vietnamese fruits and vegetables remain heavily reliant on the Chinese market due to geographical advantages and shorter shelf life. In an interview with Thanh Nien newspaper, Mr. Nguyen Dinh Tung, General Director of Vina T&T Import-Export Company, stated: "The export situation for fruits and vegetables in the first few months of the year is very positive, with high demand and steady growth in many different markets. However, in terms of market share and growth rate, China remains the largest consumer of Vietnamese fruits and vegetables. Specifically, exports to China in the first few months of the year reached US$576 million, a 27% increase compared to the same period last year; accounting for 59-60% of Vietnam's total fruit and vegetable exports."
Ms. Nguyen Thuy Thuan, Director of Thanh Long Tea Company (Ho Chi Minh City), also shared: "Last year, when China closed its borders, we made efforts to explore more markets for dragon fruit in the Middle East such as the UAE and Bangladesh… However, this year, China has resumed buying, and prices have increased significantly, so we are only focusing on selling to customers in that country, while other markets do not yield as much profit."
Durian and dragon fruit are flooding into China.
According to the Ministry of Agriculture and Rural Development, durian exports were only moderate during the first three months of the year because the season had not yet begun. However, as the supply of durian increased in April and May, exports of this commodity are expected to boom in the coming period.
Accordingly, although the peak season has not yet begun, Vietnam's durian exports have increased sharply in the first three months of 2023. In the Chinese market alone, the export value of durian is equivalent to that of dragon fruit, accounting for 23%; while across all markets, the share of durian is 16% and dragon fruit is 17%. Customs data shows that in the first quarter of 2023, Vietnam's durian export turnover reached 153 million USD, an increase of more than 8.3 times compared to the same period in 2022, with the Chinese market alone accounting for 87% of the market share, nearly 134 million USD.
Regarding dragon fruit, for the past two weeks, many traders in Long An and Tien Giang provinces have been actively searching for and purchasing dragon fruit to supply export businesses. Some traders say that dragon fruit prices are currently rising due to high demand from the Chinese market. Red-fleshed dragon fruit (grade 1) is being purchased by traders from orchards at 42,000 VND/kg; grade 2 at 37,000 VND/kg, and grade 3 at 32,000 VND/kg. White-fleshed dragon fruit is currently priced at over 20,000 VND/kg. At these prices, dragon fruit farmers are reaping significant profits, as the cost of growing dragon fruit with artificial lighting is currently around 15,000 VND/kg, while growing it in the right season is around 10,000 VND/kg.
Mr. Dang Phuc Nguyen analyzed: "Currently, dragon fruit is still dependent on the Chinese market. When China buys heavily, the price goes up, and conversely, when China stops buying, the price goes down. From before Tet (Lunar New Year) until the Qingming Festival (March in the lunar calendar) is the peak consumption period for dragon fruit in China, as it is a fruit that the Chinese really like to use in their offerings. Domestic dragon fruit production at this time is not high, so it is in high demand and the price is high. However, in about a month, Vietnam will enter its harvest season, which coincides with China's dragon fruit season from May to December, so it is highly likely that the price of dragon fruit will decrease."
Mr. Tran Ngoc Hiep, Director of Thanh Long Hoang Hau Co., Ltd. and Vice President of the Vietnam Fruit Association (Vinafruit), said: "In recent times, dragon fruit exports to India and Thailand have increased significantly. Besides that, high-end markets such as Japan, South Korea, and the EU are still developing steadily. This is due to the efforts of businesses in continuously seeking and expanding markets. However, selling prices still depend quite heavily on the Chinese market. We are advising farmers to change their harvesting time to avoid China's harvest season, helping to limit losses due to price drops and making competition more favorable."
According to recommendations from the Ministry of Agriculture and Rural Development, China is gradually tightening informal imports and shifting to formal channels, while also demanding higher quality standards for fruits and vegetables. Therefore, farmers and businesses must strictly adhere to and control the codes of growing areas and packaging facilities to protect and enhance the reputation and quality of their products.
According to Vinafruit's leadership, besides dragon fruit, many other Vietnamese fruits and vegetables are being exported very successfully, such as durian, bananas, jackfruit, mangoes, passion fruit, and most recently, sweet potatoes and taro. After the first official shipments of sweet potatoes were sent to China, farmers are now selling everything they harvest.
"Many businesses processing dried sweet potatoes and taro have reported a shortage of raw materials due to farmers prioritizing sales to export companies. Fruit and vegetable exports are forecast to continue strong growth in the second quarter of 2023, with potential growth exceeding 10%, and could reach $4 billion for the whole year, equivalent to a 20% increase compared to 2022. Durian exports alone are likely to reach $1 billion in 2023."
According to Mr. Dang Phuc Nguyen, Vietnamese mango exports this year have been quite good, but they are facing competition from Cambodian mangoes. Cambodian mangoes, mainly Keo variety, are very competitively priced. According to Chinese traders, Vietnamese mangoes, especially Hoa Loc mangoes, are very delicious but too expensive, preventing them from reaching a wider consumer base. The second important factor is the thin skin, rapid ripening, and simultaneous ripening of Hoa Loc mangoes, coupled with limited harvesting and preservation technology in Vietnam. Because of these limitations, Hoa Loc mangoes have not penetrated deep into inland China, remaining confined to areas near the border.
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