Opportunities and challenges facing Vietnam's fruit exports

Vietnam’s fruit and vegetable exports in May were estimated at US$344 million, raising the sector’s revenue in the first five months of 2017 to US$1.38 billion, up 38% year on year, according to the Ministry of Agriculture and Rural Development.

Although fruit and vegetable exports are growing, there are many risks and challenges facing the sector. Photo: Huu Chi

Major importing countries of Vietnam's fruit and vegetables included China, the United States, Japan and the Republic of Korea, with a combined share of 83.8%.

Other emerging markets such as the United Arab Emirates (UAE) and Russia also saw strong growth at 200% and 80% respectively.

Vietnam's fruit and vegetable exports for 2017 are forecast to hit US$3 billion, up 25% from the previous year as shipments to China remain steady and exports to the UAE are likely to increase due to the Emirates' ban on fruit and vegetables from Middle Eastern countries.

In addition, there are more opportunities for Vietnam's produce thanks to trade agreements that Vietnam has signed and is currently negotiating with dozens of economies around the world.

Although fruit and vegetable exports are growing, there are many risks and challenges facing the sector.

First, China currently accounts for more than 70% of Vietnam's fruit and vegetable shipments; trade is mostly done in small shipments across the border, which makes prices and volumes highly variable and unpredictable.

In addition, Chinese importers are generally less stringent in quality requirements, so if the dependence on China continues, it will be hard for Vietnam to improve the quality, branding and packaging of its fruit and vegetables so as to export to more demanding markets such as the United States, Australia, Japan, Singapore, the Republic of Korea and even the UAE.

In order to capitalise on opportunities and overcome challenges, fruit processors and exporters should forge closer alliances with farmers to ensure stable supplies and improve quality, thereby establishing the reputation of Vietnamese produce on the global market.

In regards to the role of government trade agencies, they should step up their trade promotion activities abroad, form an information network on agricultural produce, maintain established customers and expand to more demanding markets.

Finally, efforts are needed to deal with arising technical barriers and trade conflicts as well as help Vietnamese enterprises to successfully implement trade agreements and international conventions on agricultural cooperation to which Vietnam is a signatory.

(Source: NDO)