High air freight costs hinder Vietnamese fruit exports

Vietnamese lychee and other fruits are subject to high air freight fee when exported to other countries. Photo by AFP/Hoang Dinh Nam

The shipping fee per kilogram of fruit can be three times higher than the price at farmer’s garden.

Vietnamese fruit exporters are struggling to stay competitive due to high air freight costs compared to other countries.

Fruit exports from Vietnam to European countries are subject to a $3.2 per kilogram shipping fee, 44 percent higher than Thailand’s at $1.8, Dam Quang Thang, CEO of Agrice VN, told Thanh Nien newspaper. Thang’s company is exporting mango, longan, dragon fruit and lychee at a cost up to three times higher than their price at farmer’s garden.

Exports to Shanghai, China are also facing high air freight fee of $1.8 per kilogram, while the cost is $2.6 from Vietnam to Australia, Thang said.

As fruits are preferred to be consumed fresh, shipping by sea is not appropriate as the long duration can rotten the produce. However, high air freight costs are pushing up prices of Vietnamese agricultural products overseas, said Ta Duc Minh, Vietnam’s commercial counsellor in Japan at an agriculture conference in February.

In Japan, Vietnamese mango is priced higher than that of Ecuador and Thailand, even though the distance from Vietnam to Japan is shorter compared to those countries, Minh said.

Additionally, promotion of agricultural trade is also facing many difficulties due to the increase of protectionism in countries such as the U.S., China, Japan and the European Union, said Tran Van Cong, deputy director of the Department of Agricultural Product Processing and Marketing under the Ministry of Agriculture and Rural Development.

Negotiations to open foreign markets to Vietnamese agricultural products are difficult and usually take five to seven years to complete. Competition is increasingly fierce in terms of price, quality, design and food safety, Cong said.

Vietnam’s agriculture products export turnover reached $36.3 billion last year. This year, the country plans to reach $40.5 billion.