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Vietnam: New standards impact Vietnamese fruit exports

Vietnam: New standards impact Vietnamese fruit exports

The pandemic has impacted the value of Vietnamese fruit exports, while China’s new quality and origin standards are setting off alarms.

Vietnam earned US$3.26 billion from exporting fruit and vegetables in 2020, a year-on-year decline of 13%, the Ministry of Agriculture and Rural Development (MARD) has reported. Exports were down because many items with high export value registered sharp drops in volume, such as dragon fruit (-10%), which accounts for about 36% of total export value, bananas (-13.1%), durian (-56%), lychee (-22%), and watermelon (-36%). These result have been attributed to declining imports from China. Vietnam imported 25% less fruit and vegetables than in 2019. However, stable growth was registered for exports to other countries, such as Thailand (+140 %), the US and South Korea (both +11%), and Japan (+5%). It should be remembered that fruit and vegetable exports were severely hit by the COVID-19 pandemic around the world. According to MARD, Vietnam spent US$1.29 billion on importing fruit and vegetables last year, down 27.5% against 2019. Vietnam exports dragon fruit, watermelon, lychee, longan, banana, mango, jackfruit, rambutan, and mangosteen to China, which remains the country’s largest export market, accounting for 27.8% of all agricultural exports. The ministry will continue to promote the market opening process as a matter of priority.  Regarding the domestic market, heavy downpours and flooding have caused vegetable prices to rise in the central region. Similarly, southern localities have also registered increases in the prices of vegetables due to the declined supply from the provinces of Lam Dong and Dak Lak. In contrast, stable supply has led to prices of vegetables in the north seeing little fluctuation.

The search for new markets for dragon fruit

In order to enter new export markets and reduce dependency on the Chinese market, Vietnamese dragon fruit needs to increase in value. In the first 11 months of this year, dragon fruit exports fell by 10% because of the COVID-19 pandemic, but still dominated Vietnamese fruit exports, with shipments worth over US$1 billion. In Ho Chi Minh City, the fruit sells for 7,500 VND or even 6,600 VND per kg. This is because of the overwhelming dependence on the Chinese market. While it is now also exported to new markets such as the US, the EU, Japan, Australia, and South Korea, China still accounts for 92.3% of Vietnam’s dragon fruit exports. Thus, whenever there is any problem in the Chinese market such as COVID-19 pandemic, the repercussions are immediately felt in Vietnam. According to the Ministry of Agriculture and Rural Development, the fruit’s production area now extends to about 57,000 hectares and output totals over 500,000 tons, up 20-fold from 10 years ago.

Durian, pomelo and passion fruit to be exported to China

Currently, there are nine types of fresh fruits from Vietnam authorised for export to China through official channels: dragon fruit, watermelon, lychee, longan, banana, mango, jackfruit, rambutan and mangosteen. In addition to durian, the Ministry of Agriculture and Rural Development continues to work on gaining access to the Chinese market for exports of pomelo, passion fruit, avocado, sugar-apple, coconut, Lanxangia tsaoko and pineapple. A protocol has recently been signed to allow black jelly and sweet potato exports to China.

Avocado supply to become excessive 

According to the Department of Crop Production, avocado production area is growing many times faster than it was three years ago. Avocado is a perennial industrial cultivar that bears fruits after three years of growing and produces fruits for many years. So there must be planning at the provincial level and mass cultivation should be avoided. Moreover, Vietnam’s avocado varieties do not meet the size and quality requirements for export to the US and EU markets; neither is there currently a negotiation roadmap for the legal export of avocados to China. Therefore, enterprises, provinces, and farmers need to think carefully before planting avocado trees.

Key facts 2021

Capital: Hanoi

Geography: 63 provinces and municipalities

Land area: 331,236 sq. km

Population 98.2 million

GDP (2019): US$329.54 billion (expected to increase to almost $530.28 billion by 2025)

GDP per capita: forecasted to be US$3,758 in December 2021

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Vietnamese fruit exports to China plummet 

Vietnamese fruit exports to China plummet 

 

Vietnam’s fruit exports to China plunged 25% during the first eight months of 2020 due to stricter quality and origin standards imposed as well as the impact of the Covid-19 pandemic, which has caused disruption to transportation and higher freight costs. A report published by VN Express highlights how fruit and vegetable wholesale markets in China are imposing higher requirements for imported fruits to meet the demand for higher-quality fruit. This has led to a loss in value in Vietnamese fruit, as acknowledged by the country’s sector. According to a report, in the first quarter of 2020, the value of Vietnam’s exports to China fell by 29.4%.  

There have been detections of harmful bacteria in imports from Vietnam, according to Yuan Ya Xiang, general secretary of the Shanghai Fruit Business Association. 

Dang Phuc Nguyen, general secretary of the Vietnam Fruit and Vegetables Association, said that many businesses in Vietnam operate on a small scale and have poor packaging practices, whereas exporters need to possess at least 10 hectares of production area to meet the VietG.A.P. standards required to be able to export to China without quality concerns.

China is Vietnam’s largest export market, accounting for 27.8% of all agricultural exports (US$8.5 billion in 2019). Vietnam’s main exports to China are dragon fruit, watermelon, lychee, longan, banana, mango, jackfruit, rambutan, and mangosteen.

Photo: VnExpress / Giang Huy

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First Vietnamese passionfruit set sail for European shores

First Vietnamese passionfruit set sail for European shores

 

The recently signed EU-Vietnam Free Trade Agreement (EVFTA) is already bearing fruit, with Vietnam dispatching its first shipment of passionfruit to Europe. As Nhan Dan Online reports, the Ministry of Agriculture and Rural Development (MARD) announced on 16 September alongside exporter Dong Giao Foodstuff Export Joint Stock Company that 100 tons of passionfruit were on their way to the Netherlands.

At a ceremony organised to celebrate the achievement, Vietnam’s deputy minister of agriculture and rural development, Le Quoc Doanh, praised Dong Giao for its work as part of Vietnam’s efforts to boost passionfruit exports, which have increased 300% in the past five years. The minister said that Vietnam’s access to markets such as Europe, which have strict quality and quarantine protocols, should enable the country to secure access to other major world markets.

 

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First full campaign for Spanish grapes in Vietnam commences

First full campaign for Spanish grapes in Vietnam commences

2020 will be Spain’s first full season shipping table grapes to Vietnam, after gaining access in 2018 and completing successful trial shipments in 2019. Fepex reports that the first shipment of grapes from the Murcia departed for Vietnam on 9 July. Spain represents a new source of table grapes in the June-October window. Trade missions have involved Spanish grape producers (Moyca, El Ciruelo, Frutas Esther, Uniland, Frutas Torero and Hispagroup) visiting Vietnam, and reciprocal visits to Spain made by Vietnamese importers. Fepex announced good prospects for high volumes and quality in the 2020 season thanks to the favourable growing conditions in May and June.

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Stiff competition forces retailers out of Vietnam market

Stiff competition forces retailers out of Vietnam market

Vietnam is one of Asia’s fastest growing economies, with GDP growth hitting 7% in 2019. Due to the current pandemic, GDP growth in 2020 is expected to be down to 2.8%, according to Trade Data Monitor (TDM). Imports of agrifood products for Vietnam’s retail food channels were down 22% percent Y-O-Y, from US$20.4 billion in 2018 to $15.9 billion in 2019. According to the Vietnam General Statistics Office (GSO), total food and beverage retail sales in 2019 were estimated at $51 billion, up 13% from the previous year, with modern retail food channels accounting for approximately 14% of the total. Despite this expansion, three grocery store chains left the Vietnam market, including Vingroup, Vietnam’s largest grocery retailer, due to the intense competition. Several modern retail food chains, including BRG, Aeon, and Bach Hoa Xanh, continued to expand their distribution networks, not only in Hanoi and HCMC, but also in second-tier cities and provinces across the country. The number of modern grocery outlets jumped from around 1,000 in 2013 to over 4,000 in 2019. Shop&Go, a Singaporean-invested convenience store chain, exited Vietnam, selling its 87 stores to Vincommerce, a retail subsidiary of the Vietnamese conglomerate Vingroup, in April. Auchan, a French-invested supermarket chain, followed by selling its 18 stores to Saigon Co-op, a state-owned Vietnamese retailer in mid-May 2019.

In 2020, the COVID-19 outbreak hit the retail food sector in the short term, but has offered expanded opportunities for e-commerce to grow. According to the Vietnam e-Commerce Association, e-commerce experienced annual growth of 30% over the past two years and estimates that the market could reach $13 billion by the end of 2020.

Photo: Vietnam Travel Guide

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4th HortEx Vietnam expo on 17-19 March 2021

4th HortEx Vietnam expo on 17-19 March 2021

The 4th edition of HortEx Vietnam will take place from 17-19 March 2021 in the Saigon Exhibition & Convention Center (SECC) in Ho Chi Minh City. HortEx Vietnam is the first specialised exhibition and conference for horticultural and floricultural production and processing technology in Vietnam. HortEx Vietnam has built up a solid position as the leading exhibition for horticulture and floriculture for Vietnam and neighbouring countries.

HortEx Vietnam was first successfully launched in 2018. Over the past three editions, from 2018-2020, the exhibition attracted a total of 439 companies and welcomed over 13,836 trade visitors from Vietnam and abroad. For the coming years a further growth is expected.

HortEx Vietnam enables participants to meet key decision-makers, strengthen valuable contacts with customers and partners and explore the potential of this huge emerging market.

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Vietnamese bananas land on South Korean retail shelves

Vietnamese bananas land on South Korean retail shelves
Photo: Vietnamnews

 

The Vietnamese Embassy in South Korea has held a ceremony to celebrate the arrival of its bananas in the lucrative market. The first of the fruit from Vietnam officially arrived at a branch of the Lotte Mart retail chain near Seoul Station on June 16. The Vietnamese bananas are grown in the Lo Pang highlands in Gia Lai province. Lotte Mart is expected to import approximately 1,600 tons of bananas from Vietnam each year to distribute to its 81 supermarkets across South Korea. Although Vietnamese banana has been exported to South Korea since 2014, it was not sold at large supermarket chains. In 2015, around 180 tons of banana (worth US$132,000) were exported from Vietnam to South Korea, but by 2019, the volume had reached 6,685 tons (US$4.2 million). The South Korean market is a lucrative one, with consumers spending over US$300 million each year on imported bananas. The Philippines is currently the largest banana exporter, accounting for 78.6%, followed by Ecuador (7.7%), Guatemala (5.2%), Peru (5%), Mexico (1.6%) and Vietnam (1.4%).

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Efforts made to boost Australian-Vietnam trade 

Efforts made to boost Australian-Vietnam trade 

 

During the current COVID-19 pandemic, restrictions have been placed on Australian produce entering Vietnam. However, following a meeting last week between Vietnam’s Minister of Industry and Trade, Tran Tuan Anh, and Australian Minister for Trade, Tourism and Investment, Simon Birmingham, Vietnam has vowed to remove the obstacles, according to Vietnam Plus. The two ministers agreed on ways to work together to restore supply chains of the major partners.

An agreement was reached regarding the resumption of shipping and airfreight between the two countries, with great effort to be placed on diversifying supply chains so they are less dependent on certain suppliers. Anh said in order to enhance bilateral cooperation, the two countries ought to utilise existing free trade agreements, as well as strengthen trade promotions and partnerships. Vietnam has requested fast-tracked access to the Australian markets for Vietnamese exports of fresh fruits such as passion fruit and dragon fruit.

Despite the obstacles, trade between the partners was up 13.4% in the first three months of 2020, surpassing US$2 billion. Australian exports to Vietnam rose 15% to almost US$1.1 billion, while Vietnam’s exports to Australia rose 11.6% to US$924.4 million.

Photo: Vietnam Plus.

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Safety accreditation for Vietnamese vegetables 

Safety accreditation for Vietnamese vegetables 

Vietnam’s farmers now have an accreditation programme (VietGAP) to guarantee the safety of their produce and help them enter the lucrative markets of Hanoi and abroad. The north-western areas of Moc Chau and Van Ho in the Son La province are highly dependent on agriculture. There has been a rise in demand among Hanoi’s urban population for the products of the north-western mountains as they are viewed as “authentic”, safe and high-quality with taste and nutrition.

The VietGAP programme is aimed at helping the farmers of Moc Chau and Van Ho supply temperate vegetables such as tomatoes, lettuces and cabbages to Hanoi. VietGAP provides guidelines on how to grow crops and manage them post-harvest to ensure food safety and improve product quality and traceability while supporting the health of producers, consumers and the environment.

Farmers participating in the project have doubled their income per hectare by supplying VietGAP-certified vegetables to markets in Hanoi compared with supplying vegetables through traditional channels. In 2018, 160 project farmers in 10 villages in Moc Chau and Van Ho supplied 1,130 tons of VietGAP-certified safe vegetables to supermarkets and vegetable stores in Hanoi. Big C Supermarkets, Bac Tom and Mega Market (formerly Metro) market certified safe vegetables from Moc Chau and Van Ho. The project is now trying to engage new retail markets to increase demand for VietGAP-certified safe vegetables. 

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First Italian apples to land in Vietnam 

First Italian apples to land in Vietnam 

 

After five years of negotiations, Italian cooperative VOG has announced the export of the first shipment of Italian-grown apples to Vietnam. The first shipment will consist of 8 tons of South-Tyrolean apples. The biggest hurdle to be overcome during negotiations was clarification of phytosanitary requirements. These matters have now been resolved following several site inspections conducted by the Asian plant protection authority. 

Director of VOG, Walter Pardatscher, said, “With this first delivery to Vietnam, not just our association but the entire national apple market has reached a major milestone. No apple has ever been shipped from Italy to Vietnam before. I would like to take this opportunity to thank Assomela, the representative of the interests of Italian apple producers, and hope that we can consolidate and continue our cooperation with Vietnam in the near future.”

VOG now intends to expand also into the markets of Taiwan and Thailand.

TAGS: VOG, apple, Italy, Vietnam