The local fruit sector has been advised to devise a strategic plan in which to competently deal with fierce competition from foreign rivals due to newly-implemented free trade agreements (FTAs) set to boost the strong influx of foreign fruit into the Vietnamese market, according to industry insiders.

Vietnamese fruits face tough competition among the domestic market 

Nguyen Dinh Tung, General Director of Vina T&T Import Export Service Trading Services Co. Ltd, says that Vietnamese fruit products consistently fail to be displayed in an eye-catching manner in comparison to foreign fruit at supermarkets, noting that this marks the most significant reason why the company is investing in the domestic retail chain in order to sell Vietnamese fruits. 

Despite this, Tung points out the challenges which occur when attempting to win local consumers’ trust following recent violations of food hygiene and safety regulations of several local products. 

Moreover, he notes that the country’s participation in new-generation FTAs has made local fruits face increasingly fierce competition from cheap imported ones, which are generally favoured by the majority of consumers in the domestic market.

Nguyen Quoc Trinh, Chairman of the Dragon Fruit Association of Long An province, admits that dragon fruit, which is a particularly popular item among Vietnamese people, has failed to seize upon the opportunities from the domestic market, and farmers remain uninterested in selling dragon fruit locally.

“Dragon fruit is sold for between VND2,000 and VND3,000 per kilo, or sometimes VND5,000 per kilo at a maximum in the domestic market, while the export price of dragon fruit generally hovers between VND30,000 and VND40,000 per kilo,” Trinh explains the reason why growers prefer shipping the product abroad. 

Moreover, domestic consumers have a tendency to purchase one type of dragon fruit while importers globally tend to purchase all three types of the item, leading to limited consumption among the local market. 

According to statistics, the import of fruit and vegetables has increased from between US$200 and US$500 million per year in the period from 2008 to 2014 to US$622 million in 2015, rising further to US$925 million in 2016, US$1,547 million in 2017, US$1,755 million in 2018, and US$1,775 million in 2019. 

The majority of fruit and vegetables found in the domestic market are imported from places such as Thailand, China, the United States, Australia, New Zealand, India, Myanmar, the Republic of Korea, South Africa, and Chile.

The fact is that several Thai fruits such as mangosteen, durian, mango, and rambutan are selling well in the domestic market at competitive prices. For instance, mangosteen prices fluctuate between VND25,000 VND50,000 per kilo, while Thai mangoes and rambutans are typically sold between VND30,000 and VND60,000 per kilo.

The Hoc Mon farm produce wholesale market in Ho Chi Minh City states that since May, approximately 10 tonnes of Thai fruits are being transferred to the market each day, including mangosteen, bonbon, and tamarind.

Experts have therefore advised the local fruit sector to take fast action in a bid to dominate the domestic market, noting that the expansion of distribution channels among the domestic market remains of great significance amid the recent negative impact of the novel coronavirus (COVID-19) pandemic. 

In order to boost fruit consumption in the domestic market, Vina T&T CEO Dinh Tung recommends that businesses swiftly boost the spread of information with regard to the quality of local fruit products as a way of increasing consumers’ confidence in Vietnamese fruits.

Tung also points out that the fruit sector should strive to overcome inadequacies regarding the processing, storage, and distribution stages in a bid to improve product quality. 

Vu Kim Hanh, Chairwoman of the Business Association of High-Quality Vietnamese Goods, emphasised that after the COVID-19 pandemic, businesses and farmers must work together in order to seek outlets for fruit products. 

“It is necessary to strengthen co-ordination among the State, localities, relevant ministries, and co-operatives to build and connect the value chains for the sector,” says Hanh.

She also warns about the use of pesticides by farmers when attempting to grow fruit quickly, saying this practice will kill the fruit sector in the long term.