During this time in previous years, enterprises were promoting exports to China to meet increasing demand by the year’s end, however this year, many enterprises have chosen to export to other markets.
Dang Phuc Nguyen, General Secretary of the Vietnam Fruit and Vegetables Association said that China is Vietnam's main export market for vegetables and fruits, but it is slowing down, mainly because Vietnamese enterprises have not been able to adapt to new import management measures from China. To compensate for the market shortage, enterprises are trying to diversify export markets, focusing on markets that have already signed free trade agreements (FTA) with Vietnam such as the EU, RoK, and Japan.
In particular, thanks to the Vietnam-EU FTA, opportunities for exporting fruits and vegetables to the EU are opening up. Vietnam’s export of vegetables and fruits to the EU reached US$100 million in 2018, which was considered too low compared to the market demand. The EU is currently importing various types of fresh fruits and vegetables from developing countries such as avocado, mango, and potato which is a great opportunity for Vietnamese vegetables and fruits.
Many exporters of agricultural products are also trying to expand their export markets in order to reduce their dependence on the Chinese market. According to the Import-Export Department (Ministry of Industry and Trade), 2019 was a difficult year for Vietnam's fruit and vegetable sector as China - a market accounting for 70% of Vietnam’s total fruit and vegetable export turnover, strengthened their measures regarding testing, quarantine, quality control and traceability of Vietnamese agricultural products.
Vietnam's export revenue of vegetables and fruits to the Chinese market reached US$2.08 billion in the first 10 months of 2019, down 14.5% compared to the same period in 2018. This was also considered the main reason for the reduction of Vietnam’s export revenue of vegetables and fruits in the past 10 months of 2019.
However, Vietnam’s export of fruits and vegetables to other markets all increased by over 10%. Specifically, Vietnam’s export revenue to ASEAN increased by 26.6% (at US$146.4 million), to the US went up by 10.7% (at US$124.6 million), to the EU soared 32.2% (at US$121.7 million), to the RoK up by 12.4% (at US$107.4 million) and to Japan rose by 26.2% (at US$100.7 million).
Nguyen Thi Mai Linh, head of the Agricultural, Forest and Aquatic Product Import- Export Division (under the Import and Export Department) affirmed that vegetables and fruits are potential products of Vietnam with excellent growth potential in many new markets. The reduced dependence on the Chinese market could be a silver lining for Vietnam to diversify markets and focus on demanding markets.
Vietnam's export of vegetables and fruits to Asian markets including Japan, RoK, and ASEAN is expected to continue growing due to large market size, huge consumption, similar consumption habits, favourable geographical conditions for transportation, and reduced import tax rates due to the effectiveness of a number of FTA.
The Ministry of Industry and Trade (MoIT) has been trying to implement FTAs and assist businesses in taking advantage of the benefits of FTAs in addition to boosting trade promotion to consolidate and expand export markets.
Nguyen Thi Mai Linh said that although the MoIT has effectively performed its role in opening the market in terms of tariffs, the problem for the Vietnam's fruit and vegetable sector is the quality and competitiveness of products.
Because of the small scale of production, cultivation and disease management processes have not been carried out comprehensively, resulting in uneven quality. It is also difficult to control products origin and safety, apply the world's standards for traceability, and negotiate for accreditation for quality management and food safety management. Therefore, various types of Vietnamese vegetables and fruits have yet to able to penetrate into many markets despite the complete removal of tax to 0%.
In parallel with solutions to open markets, businesses need to gradually improve and stabilise the quality of export agricultural products, deeply recognise and understand the standards of the importing countries and implement appropriate production methods to meet export standards.
Willem Schoustra, Agricultural Counsellor Vietnam and Thailand of the Royal Netherlands Embassy said that the most important factor for Vietnam's vegetables and fruits is food safety and the building of a sustainable production. To achieve the target, Vietnam should minimise the use of unsafe pesticides. By doing that, the opportunity for Vietnamese vegetables and fruits to enter the EU and many other markets will continue to expand.
Vegetables and fruits is the sector that has seen the most impressive export growth over the past years with an average growth of 26.5% during the 2011 - 2018 period.
Source: Nhan Dan
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