Vietnams fruit & vegetable sector eyes bright export prospects

Although it failed to meet its 2019 targets, the fruit and vegetable sector is aiming to achieve an export target of US$5 billion in 2020 due to several advantages provided by new free trade agreements (FTAs).

Vietnam’s fruit and vegetable exports dropped one percent in 2019 compared to the previous year, reaching only US$3.8 billion. This decrease was attributed to the fallout from the ongoing trade war between the US and China. In addition, existing inadequacies prevented achieving the set target of US$4 billion.

The Vina T&T Group reached about US$30 million in total export turnover in 2018. With the opportunities provided by FTAs to which Vietnam is a signatory, the group set a growth target of 20 percent in 2019, but failed to meet it.

This year, the Vietnam Fruit and Vegetable Association expects the sector’s export value will increase sharply to reach about US$5 billion due to the EU-Vietnam Free Trade Agreement (EVFTA) poised to come into force. When the EVFTA takes full effect, the country’s export tariff on fruit and vegetable products to the EU will instantly be slashed to zero percent.

“Vietnam’s fruit and vegetables are subject to high tariffs of 20-30 percent when exported to the EU. Therefore, tariff reduction will benefit businesses,” Pham Cao Van, director of the Kim Hai Import-Export Company, said.

According to the Vietnam Fruit and Vegetable Association, several local vegetable and fruit products have started to make inroads into more demanding markets. For example, mangoes have officially risen to become the nation’s sixth fresh fruit exported to the US market, following litchi, longan, rambutan, star apples, and dragon fruit. In addition, the Ministry of Agriculture, Forestry and Fisheries of Japan has sent a letter to the Plant Protection Department under Vietnam’s Ministry of Agriculture and Rural Development, indicating that there is a market for Vietnamese litchi there. The move is expected to open up a wealth of opportunities for the fruit and vegetable sector.

However, the sector must work to overcome shortcomings of its production activities to meet international standards. In fact, the cultivation area under GlobalGAP standards makes up only five percent of roughly one million hectares of land.

Almost all fruit and vegetable exporters are now focusing on promoting deep processing in order to better preserve products to increase competitiveness.