Vietnam Fruit Production and Trade: The Opportunities and Challenges for Smallholders docx

8 AGRICULTURAL PRODUCTION ZONES IN VIETNAM North East Red River Delta Central South North West 19% Central North Central Highland Mekong River Delta 34.1% South East 17% • There are

Longan Lychee

M ango Banana Avocado Pummelo Sweet orange

M andarin

M angosteen Rambutan Durian Sweetsop Soursop Sapodilla Grape Papaya Jackfruit Langsat Pineapple Guava Watermelon Dragon fruit Young coconut Passionfruit Plum Lime Star apple

Babados cherry

Vietnam Fruit

Production and

Trade: The

Opportunities

and Challenges

for Smallholders

Nguyen Van Hoa,

Southern Fruit Res Inst.

VIETNAM hoappd@hcm.vnn.vn

DT (x1000 ha)

346.4 384.8

426.1

384.4

496.0 544.0

609.6

677.5 692.2

747.8

0

100

200

300

400

500

600

700

800

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Graph 1: Vietnam fruit tree area during 1995-2004 (General statistic Department, MARD and Provincial

Agriculture Services)

Area (x1000ha)

Plan up to 2010

Earlier program target

32 50

23.1 Western highland

5.

38 60

30.2 Southern of Central

Coastal region

4.

80 70

58.5 Northern of Central

region

3.

1.000

380 150

230 90

90 128.4

South-East region

6.

170 178.4

Northern highland

2.

750 767.1

Total

250 269.3

M.D region

7.

60 79.2

Red River Delta

1.

Area in the year of 2005

Location

Table 1: Fruit production area in Vietnam (Source: MARD 2007)

8 AGRICULTURAL PRODUCTION ZONES IN

VIETNAM

North East

Red River Delta

Central South

North West

(19%)

Central North

Central Highland

Mekong River

Delta (34.1%)

South East

(17%)

• There are 8 Agricultural production areas in Vietnam

• The Mekong delta is producing a lot

of citrus, mango, longan, sapodila, milk fruit (star apple ) , etc

• The Southern East is a major producer of durian, rambutan, mangosteen, jackfruit, etc.

• The Central highland in the South produces avocado, persimmon, strawberry, etc

• The Central of the South is major producer area of dragon fruits, mango, grape, etc.

• Up to HUE, the old Capital of Vietnam, we grow tropical fruits

• After HUE is sub –tropical condition,

we have sub- tropical fruits like plum, peach, persimmon, litchi, longan, citrus, etc

26.4 25.0

2.0 2.0

Grape

-133.3

13.5

8.5 Dragon fruit**

-146.0

20.2 Durian

472.7 414.9

47.4 44.3

Pineapple*

380.9 337.7

78.7 77.5

Mango

379.6 507.5

113.7 110.2

Lychee,

Rambutan*

1,354.3 1,329.4

103.4 102.2

Banana*

242.2 209.3

30.4 28.6

Pomelo *

606.4 540.5

87.2 82.7

Orange, lemon,

mandarin

628.8 606.4

120.3 121.1

Longan *

2005 2004

2005 2004

Production (x1000 tonne)

Area (x1000 ha) Fruit tree

Table 2: Area and production of major fruit trees in Vietnam 2004 and 2005

(Source: MARD 2006)

*Export fruit ** Number one fruit export

Table 4: Vietnam major fruits and

vegetables export value (VinaFruit-2005)

24,60 40

259,082 2006

760,000

2010

( plan)

35,000 36

235,000 2005

142,801 42

329,900 2001

120,351 33

196,58 2000

67,068 36

182,554 2003

121,529 42

219,698 2002

20,638 39

178,800 2004

China (1000 USD)

Number of country

Value (1000 USD) Year

* From 2003, there is a sharp reduction export to China, as stronger competitions of fruits from Thailand, Philippines, and Malaysia, etc

Table 6: Fruit export markets, November 2006

(Vietnam Business news, 4th, Jan 2007)

Singapore, Brunei Sapodilla

13

Netherlands, Japan Acerola

12

Netherlands, Cambodia Custard-apple

11

Netherlands, France, China Lychee (dried)

10

Canada, Netherlands, China, Cambodia Rambutan

9

Latvia, Russia, China Banana

8

UK, Malaysia, US, France, Singapore, China Jackfruit (dried)

7

Taiwan, Canada, Malaysia, USA, Japan, France, Singapore, China Other fruits

6

Taiwan, South Korea, Malaysia, China Coconut meat

5

South Korea, France, China.

Longan

4

Taiwan, Canada, Hong Kong, Kuwait, Liberia, Malaysia, US, Sweden, Sudan.

Fruit jams

3

Germany, UK, Poland, Belgium, Estonia, Netherlands, South Korea, Italia, Mongolia, Malaysia, US, Norway, Russia, Japan, France, China.

Pineapple canned

2

Thailand, Hong Kong, Taiwan, Netherlands, Singapore, China, France, UK, Germany, Italia, Canada, Malaysia, Switzerland, Indonesia, Norway, Saudi Arabia, Belgium

Dragon fruit

1

Export Markets Commodities

I Potentials for development in

production and export:

1 Large number of varieties with good to premium quality fruits

in both tropical and subtropical fruits (deciduous fruits).

2 Conditions to increase in production area and yield are of potential for Vietnam fruit industry

3 The increasing in export value of Vietnam fruit is of potentiality which could increase in the coming time

4 The export volume of Vietnam fruits and its values are increasing and are accessing a number of markets in the world.

5 The Vietnamese in Vietnam and Vietnamese overseas prefer

to eat Vietnamese fruits, like mango, pomelo, star apple, etc

6 The Government is considered fruits

II Efforts taken to enhance the marketing

of tropical and sub-tropical fruits

EFFORTS TAKEN FOR DOMESTIC MARKETS:

-Implementing EUREPGAP standards for key

fruits like: dragon fruit, mango, longan, pomelo,

pineapple, lychee, etc.

Among them , dragon fruits got EUREPGAP Certificate in 2006

- VietGAP is developing, so that Certification is going to do

much more easy.

- GAP Cluster is developing since 2005, a join efforts among farmers, traders, and local officers.

- METRO, Supermarket System in many countries, is helping

to improve Value chain in Vietnam which start first with pomelo

in the South.

II Efforts taken to enhance the marketing

of tropical and sub-tropical fruits

EFFORTS TAKEN FOR DOMESTIC MARKETS:

- Implementing EUREPGAP standards for key fruits like: dragon fruit, mango, longan, pomelo, pineapple, lychee, etc.

Among them , dragon fruits got EUREPGAP

Certificate in 2006

- VietGAP is developing, so that Certification is going

to do much more easy.

- GAP Cluster is developing since 2005, a join efforts among farmers, traders, and local officers.

- METRO, Supermarket System in many countries, is helping to improve Value chain in Vietnam which

start first with pomelo in the South.

EFFORTS TAKEN FOR INTERNATIONAL MARKETS:

- Implementing steps like for domestic markets,

- Try to Overcome Plant Quarantine Barriers with US, Japan, Australia, New Zealand SPS Agreement with US and Japan are in processing.

- Some efforts in producing Organic fruits started, first on Dragon Fruit

- We are having International Projects from US, Japan, Australia, New Zealand, India, ADB, ect

to support our Fruit Industry improvement.

GLOBALGAP

For Producers

• 20 ha of Dragon Fruit got EUREPGAP Certificate

• Other 80 ha DF got GLOBALGAP Certificate

• One Packhouse going to get BRC Certificate

• 20 ha of Mango going to get GLOBALGAP on Feb, 2008

BRC For Packhouse

Manual for Dragon Fruit Quality

production

BOOKS WRITTEN FOR

GAP PRODUCTION

III Supply chain mechanism

- Current apply in Supply Chain is a poor link between the producers and the whole-sellers/ retailers

- Most of the producers sell their fruits through the collectors, the farm gate price is around haft of the consumers price.

- Now with METRO SUPERMARKETS supports, a new Supply Chain are seting up for vegetables, and fruits.

- AusAID , Autralia is conducting a project to improve Supply Chain for Mango and Pomelo

- With these support, the farmers improving their fruit quality to meet the demand of the buyers

Challenges for fruit industry in VietNam

- The drawback is of small land holder and scatter in which farm size is about 0.8 ha in Mekong Delta region and 3 to 5 ha in East-South region

- No linking to each other between the farmers, hence, the fruit volume and stable quality, price are problems

- Packaging techniques and facilities are poor in comparison with Thailand, etc.

- Export volume still lower than its capability and potential

- Weak linking between traders and producers.

- Government policy still not clear

IV Constraints in developing the markets for

fresh fruit produce

CONSTRAINS ….FOR LOCAL MARKETS:

- Strong competition from China (deciduous fruit), and Thailand (mangosteen and longkong).

- Income of Vietnamese is still low in the region.

- Good quality Vietnamese fruit are selling very high price

in the local market, about 2 times higher than in Thailand, good durian 1,5 US/kg, good mango 3 US/kg

- Stable quality and supply of local fruit are concerned by the Supermarkets (as a result of no link among farmers)

- Poor packing, hence, high post harvest lost

CONSTRAINS ………FOR EXPORT MARKETS:

- Thailand, Malaysia, Philippines fruit industries, etc have developed long before Vietnam (we started from 1990’s) Hence, Vietnam fruits facing strong competition from these countries for the same kind of fruits in the International markets.

- Vietnam fruit industry is still at developing stage for quality, safety, quantity to meet the demand of high value export markets, and to fulfill EurepGAP and BRC standards (post harvest standard).

- Vietnam has not signed SPS Agreement with many other countries like Thailand had done.

- Air transportation cost to Europe is higher than Thailand.

- Export promotion activities are little as compared with that of Thailand, etc.

V How small farmers should react to the rapid

preferences:

- To join hand in production and marketing, by making group for bigger volume, stable quality, and lower price.

- To produce Safety and Quality Fruit that meet the VIETGAP/ GLOBALGAP standards

- To improve packing techniques, and invest in storage facilities, to reduce post harvest lost.

- To create link, sign contracts with exporters, supermarkets, wholesellers.