Huge potential for fruit and vegetable exports

08:23 | 01/01/2017 Trade

(VEN) - Fruit and vegetable exports have grown 30 percent monthly since early this year. These exports will experience a higher growth if logistics costs are reduced.  

Australia has licensed Vietnamese mango imports

Fruit and vegetable exports to reach US$5 billion

Deputy Director of the Ministry of Industry and Trade’s Department of Export and Import Phan Thi Dieu Ha said that fruits and vegetables are a highlight on Vietnam’s export picture.

The Ministry of Agriculture and Rural Development’s statistics show that fruit and vegetable exports hit almost US$2 billion in the first 10 months of 2016, up more than 30 percent from the same time in 2015, and are expected to reach US$2.5 billion this whole year.

Director of the Ministry of Agriculture and Rural Development’s Plant Protection Department Hoang Trung said that 2016 is another good year for fruit exports. Australia has opened its markets to Vietnamese mangos after nine years of negotiation, while dragon fruit is expected to be licensed. Chinese Taipei has accepted Vietnamese dragon fruit exports after many years of suspension. The fact that hard-to-please markets have at the same time opened their markets to Vietnamese fruits not only diversified export markets of Vietnamese businesses but also encouraged other foreign markets to welcome Vietnamese fruits.

The export development potential is huge, as Vietnamese fruits have become increasingly loved in foreign markets. Fruit and vegetable exports are expected to reach US$5 billion per year in the future if strenuous efforts are generated.

Solving the transport cost problem

The competitiveness of Vietnamese fruits and vegetables can be improved if the transport cost (including logistics costs) is reduced. According to a recently published World Bank report, the logistics cost (transport, warehousing, customs procedure and other costs) in Vietnam is six percent higher than in Thailand, 12 percent higher than in Malaysia and triple that in Singapore. Of the total supply chain’s cost, transport accounts for 50 percent, while warehouses and holding yards represent 30 percent.

For example, lychees are sold for only VND20,000 per kilo in Vietnam, while the cost to transport them from Vietnam to Australia by airplane is US$2.95 per kilo. This transport cost is relatively high though it is partially supported by the Vietnam Airlines.

Businesses are recommended to choose professional logistics companies to minimize costs.

Sea transport is must cheaper but takes a considerably longer time than airplane. Therefore, it is very important for businesses to invest much more in processing and preservation technology in order to keep products fresh as long as possible.

Nguyen Hoang Thuy - the Trade Representative, the Vietnamese Trade Office in Australia said that the high transport cost

makes Vietnamese fruits less competitive than products of the same kind from other countries.

Phuong Lan