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Vietnamese fruit: a "billion dollar" possibility

The recent approval of various Vietnamese fruits for import into a significant market showcases the vast potential for this industry. Experts predict that 2023 will be a year of growth for the fruit and vegetable sector in Vietnam.

After being impacted by the COVID-19 pandemic, the opportunities for growth in the Vietnamese fruit and vegetable industry are becoming increasingly evident as major consumer markets open their doors to imported products.

Recently, many types of Vietnamese fruits have been granted official approval for import into China, including durian, which was cleared for import in September. Additionally, the Ministry of Agriculture and Rural Development has received information regarding the Protocol to export sweet potatoes to China. Passion fruit was also piloted through a number of designated border gates in July 2022.

As of now, Vietnam has 13 officially exported agricultural products to China, making it the largest "customer" of the Vietnamese fruit and vegetable industry, accounting for over 50% of the total export value. In October, the export value of vegetables and fruits to this market also saw strong growth, reaching $152 million, an increase of 44% compared to October 2021.

The Vietnamese fruit industry is not limited to the Chinese market. In the United States, pomelo has officially reached consumers after five years of negotiations, making it the seventh fruit from Vietnam to be exported to the US. Additionally, coconut is expected to be the next fruit to be exported to the United States.

Furthermore, on November 24, the Plant Protection Department also announced the completion of the opening of the Japanese market for longans and the New Zealand market for lemons and grapefruits.

China recently authorized the formal import of durian

Opening up growth prospects for 2023

Throughout 2022, China has maintained a strict Zero Covid policy, which has greatly impacted Vietnam's fruit and vegetable exports. In the first nine months of the year, the turnover for this industry decreased by 35% compared to the same period in 2021, representing a 12% decrease in overall industry turnover and a total value of just over $2.4 billion.

However, by October, Vietnam's fruit and vegetable exports had begun to recover, recording a total of $310 million, an increase of 23% from the previous month and 28% compared to October of the previous year, according to data from the General Department of Customs.

Businesses in the industry have high expectations for the future, with many anticipating a strong rebound in fruit and vegetable exports in the final months of 2022 and throughout 2023.

Mr. Nguyen Dinh Tung, General Director of Vina T&T Group, stated that the export potential for vegetables and fruits in 2023 is huge. He cited the example of durian fruit, noting that China alone spends around $4.5 billion annually importing it from other countries. Vietnam, with its proximity to China and faster transportation options, is well-positioned to take advantage of this market and bring significant profits and high sales to the agricultural industry.

Recent developments in the durian industry seem to support these predictions. Vietnam's durian exports have been well-received in the Chinese market, due in part to their competitive pricing compared to those of Thailand and Malaysia. The average price for a ton of Vietnamese durian is $4,466, compared to the average price of $5,033 for Thai durian.

Mr. Dang Phuc Nguyen, General Secretary of the Vietnam Fruit and Vegetable Association (Vinafruit), noted that the high quality of Vietnamese durian, despite its lower price, has been particularly appealing to Chinese consumers. He also highlighted that Vietnamese durian is often softer and more fragrant than Thai durian, which is preferred by many Chinese and Vietnamese consumers.

Furthermore, the General Director of Vina T&T Group stated that with the official export of Vietnam's durian fruit to China, the potential for growth in the vegetable and fruit export industry is significant. He stated, "If we have good access to this market, take advantage of year-round planting compared to Thai durian with only one crop, and ensure export quality, the value can be more than $1 billion."

In recent years, Vietnam's fruit and vegetable exports to China have typically reached a turnover of $2-3 billion per year. Experts believe that the shift from unofficial to official exports will help drive positive growth in the fruit and vegetable industry.

In addition to durian, Vietnam's pomelo exports to New Zealand and the US also hold great potential. With preservation technology that allows for a shelf life of up to 90 days and a year-round raw material supply, these fruits are well-positioned for deep penetration into these markets.

The General Director of Vina T&T Group predicts that 2023 will be a boom year for the fruit and vegetable industry. He forecasts that the industry as a whole will experience growth of 20-30% as China gradually removes its Zero Covid policy and places greater emphasis on healthy, fresh, and nutritious products like Vietnamese fruits.

(Enterprise & Business)

Agricultural Products Industry Report - November 2022

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