Bright colors on fruit and vegetable export

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The Customs magazine interviewed Mr. Dang Phuc Nguyen, General Secretary of the Vietnam Fruit and Vegetable Association about the potential of this industry in 2023.

Mr Dang Phuc Nguyen

How do you evaluate the export turnover of the fruit and vegetable industry in the first 2 months of the year and the expected results in the first quarter?

In the general context, vegetables and fruits are the few items with positive growth right from the beginning of the year, in which exports to the Chinese market grew well by about 23% compared to last year; this is the main factor that the vegetable industry grew positively. Furthermore, China's withdrawal from the "Zero-Covid" policy has helped Vietnam's fruit and vegetable exports to this market regain their growth momentum.

Besides, in 2022 we signed several important decrees, especially in July 2022, we signed a protocol with China on durian export; in November signed a protocol with China on exporting bananas, then sweet potatoes, bird's nests hit on the occasion of the Lunar New Year, the Chinese market for vegetables and fruits increased sharply; In October, the US allowed the export of pomelos to this country, in November, New Zealand signed an agreement to open the export market of Vietnam's pomelos and lemons to this country.

Among the protocols and agreements signed, the most significant is the Chinese market, accounting for 56-60% of export turnover. So when there is a protocol to export bananas, durian is the key product, and the export turnover has grown very high. Moreover, on January 8, China opened the border gate and removed the epidemic control and prevention policy; goods can go directly across the border to deliver goods without waiting for a change of vehicles or trucks. As a result, durian from Dak Lak to the border via the Chinese market only took 1.5 days instead of before it took 2-3 weeks to reach the market. Thus, businesses save a lot of logistics costs.

With those advantages, it is expected that in the first quarter of the year, the fruit and vegetable industry will achieve an export turnover of about USD 900 million to USD 1 billion. Although, in the first two months of the year, the key products are durian which has not yet entered the main season, in March-May durian, and bananas in the main season, export turnover is forecasted to increase further.

What factors affect the growth of the fruit and vegetable industry in the second quarter and the end of the year?

To boost the export of vegetables and fruits in 2023, one of the most important requirements is to quickly adapt and best meet the new requirements on quality, food hygiene and safety; register export enterprises according to the regulations of each country; expand the number of planting area codes, packing facilities for many items. The important issue now for the industry is to improve product quality and implement traceability to meet the demand of each market best.

For instance, the current problem for durian products is that the number of planting area codes and packaging facilities are limited; many businesses have run out of quotas to export to the Chinese market, and businesses have to wait until next year to get a new one. That is the bottleneck of durian, which means great potential but few codes and limited output.

What is the cause of this problem?

The greatest difficulty at present is that there are not many planting area codes and packing facility codes to meet the requirements of the Chinese market. For example, when a Vietnamese business contacts Chinese customers, your business will first ask what a code is. Currently, there are only 246 planting area codes / 12,000 ha of durian growing area, nearly 100 codes of packing facilities, in the durian growing area of Vietnam is 110,000 ha. Meanwhile, Thailand was granted 20,000 planting area codes and nearly 2,000 packing facility codes.

It means when the Chinese Customs checks to issue the code of the growing area and the code of the packing facility, many businesses do not meet the standards, the records are many, but the rate is not high; there are reasons such as: improperly packing plant protection pesticide, inadequate insect traps, and unsanitary harvesting.

Therefore, to overcome this problem, the Plant Protection Department (Ministry of Agriculture and Rural Development) needs to strengthen propaganda, dissemination, guidance and training for farmers, packaging catch, and understand the standards and conditions to be granted a code. It will be very difficult for farmers to cope on their own. On the business side, the leader needs to change the development model to ensure food hygiene and safety standards and plan the planting area to meet the standard in terms of area to obtain the planting area code.

Besides maintaining the opened Chinese transmission market, what solution is needed to expand the potential new market?

The entrance to China is still very narrow, while the market demand is great. This market consumes about 300 million tons of vegetables and fruits each year, but they only import 7-8 million tons. Annual consumption is 200kg/person. Therefore, the room is still very large while the supply of Vietnam is very potential.

However, the biggest difficulty in promoting fruit and vegetable exports to China is that there are still 7/12 export items that do not have a protocol. This makes it difficult for some key products, such as dragon fruit, mango, and jackfruit, to reach their full potential.

Thailand's fruit and vegetable industry is very famous, with an export turnover of USD 8.5 billion, but 70-80% of the goods are exported to the Chinese market. That means China is still a strategic market, while Vietnamese vegetables and fruits exported to this country are only more than 50%. So it is partly correct to say that it depends on China, but this is a very important market, and taking the Chinese market will open up other markets.

Vegetables and fruits are a commodity industry; if existing advantages are promoted and limitations are overcome, the fruit and vegetable industry will surely develop more strongly in the future. Particularly in 2023, the new export milestone of USD 4 billion is very positive.