Exporting Vietnamese fruits and vegetables and the fear of "Achilles' heel"

Japan Apple LLC (with office in Tokyo, Japan) has just suffered hundreds of millions of dong in losses related to two shipments of durian and chili imported from Vietnam that were sampled and analyzed by the Japanese quarantine agency and found to contain pesticide residues.

Fruit and vegetable exports are a bright spot.

Specifically, a shipment of durian weighing about 1.4 tons was imported through a large enterprise in Vietnam from October 5 at a price of 132,000 VND/kg. When the goods arrived in Japan, the country's quarantine agency took samples for testing and discovered the residue of the active ingredient procymidone at a content of 0.03 ppm, while the Japanese standard is 0.01 ppm. This is an active ingredient in pesticides that kills mold.

Regarding the shipment of more than 4 tons of chili, the Japanese quarantine agency took samples for testing with 4 active ingredients and found 2 active ingredients with residual residue exceeding the allowable threshold, including tricyclazole 0.2 ppm and hexaconazole 0.03 ppm, while the allowable standard is 0.01 ppm.

According to Ms. Le Thi Kieu Oanh - Director of Japan Apple LLC, both shipments were requested to be destroyed by the Japanese quarantine agency. For the durian shipment alone, the business suffered a loss of more than 200 million VND. As for the chili shipment, if it is not imported to compensate, there is a high possibility that it will be fined according to the contract.

Previously, in September, Japan Apple LLC imported a shipment of unripe durian. After many days of delivery to the partner, the durian could not ripen normally but was forced to ripen, had a sour smell, forcing the company to recall it and suffer heavy losses.

Ms. Le Thi Kieu Oanh said that the Japanese quarantine agency is applying quarantine regulations on all durian imported from Vietnam, causing businesses to incur high costs and prolonging the storage time, affecting the distribution and consumption stages.

Meanwhile, Vietnamese businesses almost deny responsibility after exporting their goods. In some cases, businesses ask their partners to share responsibility, but they deduct the price of the goods but then find ways to increase the selling price.

The latest updated data from the Ministry of Agriculture and Rural Development shows that fruit and vegetable exports have reached a turnover of more than 5.3 billion USD in 11 months of 2023. This is a record high number ever, however, behind this encouraging number, there are still many concerns about the loopholes in the fruit and vegetable industry that need to be overcome soon.

The story of durian industry is an example. Although this item contributed 2 billion USD to the total export turnover of fruits and vegetables in the past 11 months, however, there is a paradox that despite the high price, many businesses purchasing for export are suffering heavy losses.

According to Mr. Dang Phu Nguyen - General Secretary of the Vietnam Fruit and Vegetable Association - the "Achilles' heel" weakness of durian is the very loose connection between gardeners and businesses. For profit, they are willing to break contracts, which causes damage to businesses.

In addition, it is necessary to clearly see the fact that not all farmers are familiar with contract production, with compliance with processes, standards, and regulations for commodity production. When the subjects only care about immediate benefits without seeing the long-term benefits of stable production and consumption, the disruption of the chain is inevitable.

Not to mention that due to the spontaneous business practices of farmers that still exist, production is fragmented, fruit and vegetable products on the market are inconsistent and of low quality.

The inherent weakness of loose linkages requires the Vietnamese fruit and vegetable industry to quickly patch this loophole and avoid breaking existing linkages. Once this weakness is eliminated, only then can Vietnamese fruit and vegetables advance further in the global market.

Regarding the Japanese market, Mr. Ta Duc Minh - Vietnam Trade Counselor in Japan - said that Japan is a market with very high standards for imported goods, especially fruits. Once penetrating this market, exports will be stable and long-term, but businesses must ensure product quality, selling price and supply output.

Mr. Ta Duc Minh also recommended that Vietnamese export enterprises when doing business with Japan should not stop at buying outright or selling off, but should continue to monitor and control how their products are received by the market and how customers respond, in order to avoid unnecessary risks.

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