Over 80% of Vietnam's fruit exports are fresh produce, leading to high risks and lack of sustainability

Fresh produce exports are risky

According to the latest data from the General Department of Customs, in the first five months of 2024, fruit and vegetable exports reached over $2.5 billion, an increase of 25.7% compared to the same period last year. The main export products generating high value are still durian, dragon fruit, jackfruit, bananas, etc.

However, experts believe that while the market potential is still quite large, fruit and vegetable exports face many challenges and issues that need to be addressed to bring higher and more sustainable value.

Discussing this issue, Nguyen Anh Son, Director of the Import-Export Department (Ministry of Industry and Trade), stated that the production and processing processes of producers and enterprises do not fully comply with strict quality regulations, traceability requirements, and cultivation area codes. The production scale is still small, fragmented, lacking linkage, and the quality is unstable. Most export products are still in raw form, lacking deep processing.

"Our country's fruit and vegetable exports have abundant domestic supply, while the demand in traditional and potential markets tends to increase. However, we need to frankly acknowledge that the quality of fruits and vegetables is still not high, the products are not uniform, and there are still residues of pesticides," said Nguyen Thanh Binh, Chairman of the Vietnam Fruit and Vegetable Association.

Additionally, the reality shows that the rapid growth and high profits of some products in recent times have revealed many downsides of this sector. These include competitive buying and selling, price chaos, contract breaches, and breaking of the supply chain. These are also reasons leading to violations of state regulations on cultivation area codes, packaging facilities, food safety, and export standards.

Bold investment in deep processing and product diversification needed instead of relying solely on fresh and raw products

It is evident that the fundamental downside of the fruit export chain is the existence of unhealthy competition in both production and consumption, leading to a focus on quantity over quality in production.

Notably, Dang Phuc Nguyen, General Secretary of the Vietnam Fruit and Vegetable Association, pointed out that over 80% of fruit export products being fresh is a disadvantage. This exposes Vietnamese fruits to many risks, from the purchasing process and preservation to transportation and potential violations of cultivation area codes, safety, and quarantine regulations. "Fresh fruits have a very short shelf life, so they need to be preserved very carefully after harvest. Enterprises must shorten the transportation time to gathering points and arrange the export process scientifically to handle incidents promptly and minimize risks," emphasized Mr. Nguyen.

Exporting agricultural products in general, and fruits in particular, in fresh form incurs significant logistics costs, while the value added is not high. Especially in the context of inflation in major consumer markets, this is a considerable disadvantage. For example, more than half of the volume of a container of exported durians consists of shells and seeds. If processed into durian segments or ready-to-eat products, one container of finished products would be equivalent to three containers of whole fruits, thereby significantly reducing costs. Lighter in weight but higher in value.

According to a representative from the Long Khanh Farmers' Association in Dong Nai, the risk of violating cultivation area codes with other fresh fruit exports is also very high. Meanwhile, many localities and enterprises have not really focused on rapidly developing cultivation area codes for export fruits, and there are no regulations in place for handling violations.

In May 2024, fruit and vegetable exports reached $665 million, an increase of 10.3% compared to the previous month but only a 1.2% increase compared to the same period in 2023. Currently, the country is entering the main harvest season for many fruits such as lychee, mango, durian, jackfruit, longan, and dragon fruit, resulting in high demand for consumption and export

Deep processing is the key to bringing Vietnamese fruits to the world

Therefore, to overcome the limitations and avoid the aforementioned risks, improve quality, and increase the export value of fruits, this billion-dollar industry must boldly invest in deep processing and diversify products instead of only selling fresh and raw products.

According to experts, promoting deep processing is essential to bring Vietnamese fruits to the global market and increase their value. Many products only require simple processing to become popular in the market. For example, in American supermarkets, fruit products provided by Mexico, which combine various types of pre-cut, frozen fruits, are in high demand. For a reasonable price, consumers can enjoy a variety of fruits conveniently.

"Businesses need to ensure the quality of exported fruits. At the same time, they should enhance the level of processing, starting with simple products first, given the current limitations in capital and technology. Additionally, understanding customer preferences to diversify export products is crucial," emphasized Dang Phuc Nguyen.

Nguyen Thi Thu Huong, Deputy Director of the Plant Protection Department (Ministry of Agriculture and Rural Development), pointed out that Vietnam's competitors in fresh fruit exports, such as Thailand, Malaysia, and the Philippines, continuously invest in science and technology. They have established their brands and market positions internationally. Thus, Vietnamese enterprises need to focus on brand building and invest appropriately in technology.

Huong also noted that the negative impact of El Niño has been reducing the global supply of fruits and vegetables. This presents an opportunity for Vietnam if it can offer high-quality products and meet the demands of challenging markets. To seize this opportunity, businesses need to actively renew contracts. Additionally, it is essential to develop and manage cultivation areas well to create standardized raw material regions for sustainable exports and control the harvest. Timely updating the technical requirements from importers will help Vietnamese agricultural products penetrate major markets.

Experts further advise that Vietnamese enterprises and cooperative groups should provide recommendations, disseminate information, and establish processes to ensure that farmers strictly comply with quality regulations. This will ensure that the products increasingly meet market demands. Based on this, we can build a brand for Vietnamese agricultural products. Addressing these weaknesses, fruit and vegetable exports promise to see many positive market changes, enhancing processing capacity to achieve high growth and set new export records this year.

Nguyen Quoc Toan, Director of the Digital Transformation and Agricultural Statistics Center (Ministry of Agriculture and Rural Development), identified the bottlenecks that need to be resolved in the fresh fruit industry as: rapid growth; competition in purchasing and collecting goods; business ethics; processing infrastructure; quality management; linkage between farmers, traders, and export enterprises; human resources; and standard processes.

Kate Tran - VTV