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Vietnamese fruits lose ground to imports, could lose home market

Dislodged from supermarkets, Vietnam’s fruits are being displayed at sidewalk shops and sold by street vendors.

Thanks to its geographical position and natural conditions, Vietnam has great advantages to develop agricultural production. The country harvests 28 million tons of vegetables and fruit each year. Negotiating for market entry, therefore, is an important solution which ensures consumption of these products.

Vietnamese farmers and businesses in July received good news as durian and passion fruit now can be exported to China under official quotas.

However, Vietnam’s vegetable and fruit exports in the first seven months of the year brought turnover of $1.92 billion, down by 16.1 percent compared with the same period last year.

China is the biggest importer of Vietnam’s vegetables and fruits with a market share of 47 percent in H1. However, the export turnover to the market decreased by 34 percent in comparison to the same period last year to $799 million.

A report from the International Trade Center (ITC) on the world’s 10 largest vegetable and fruit markets shows that Vietnam’s exports remain modest, except for exports to the Chinese market.

The US is the world’s largest market which imported $25.5 billion worth of vegetables and fruits in the first five months of the year. However, its imports from Vietnam accounted for just 0.75 percent of total value.

Imports from Germany, the second largest market which spends VND13 billion a year to import vegetables and fruits, just accounted for 0.19 percent.

As for China, the country imported $10.3 billion worth of vegetables and fruits in the first five months of the year, an increase of 11.1 percent compared with the same period last year, but its imports from Vietnam just accounted for 9.5 percent.

In other markets, including the UK, France, Canada, Japan, Spain and Hong Kong, Vietnam’s fruits only account for 0.17-1.77 percent of market share. The figure is 5.75 percent in South Korea.

Minister of Agriculture and Rural Development Le Minh Hoan admitted that the amount of vegetables and fruits sold abroad is small and there are only a few deals at times, and the products are displayed mostly in Asian owned shops.

Meanwhile, Vietnam spent $1.1 billion by the end of July to import fruits, an increase of 27.3 percent compared with the same period last year. China, the US and Australia were the three biggest fruit suppliers to Vietnam in H1, which accounted for 35.6 percent, 16.4 percent and 9.3 percent of market share, respectively.

Vietnam’s fruits ‘drift’ to sidewalk shops

When Vietnam negotiated free trade agreements (FTAs), Vietnam’s businesses were warned that foreign products would land in the domestic market. However, the increase in imports in recent years has exceeded expectations.

Some years ago, supermarkets sold foreign fruits. These were considered luxury products affordable only to high income earners. But now, imported fruits are not only displayed at supermarkets but also at fruit shops.

Previously, only Vietnamese fruits were available at traditional markets. But now, fruit imports from Europe, the US, China, Thailand and Taiwan are available everywhere.

At Dai Tu Market in Hoang Mai district in Hanoi, for example, one stall was seen selling more than 10 kinds of fruits, and most were imports.

Bui Thi Lan, a petty merchant at the market, said that foreign fruits account for two-thirds of total products at her stall.

“How much and what kind of fruits to sell depends on buyers,” Lan explained why most products at her stall are imports.

Five years ago, she mostly sold Vietnamese fruit, which accounted for 75 percent of total products, while the remaining was Chinese products. Recently, as imports have become cheaper, she now mostly sells foreign products.

Dang Phuc Nguyen, general secretary of the Vietnam Vegetable and Fruit Association, admitted that in large cities, foreign fruits occupy an overwhelming market share.

As Vietnam is a member of many FTAs, it imposes preferential tariffs on fruit imports, which explains why foreign fruits are becoming cheaper. This, plus high quality and diversification, have won consumers’ hearts.

In previous years, many Vietnam’s businesses focused on selling products to China, which was considered an easy-to-please market, and they did not pay attention to the domestic market. However, as China has become choosier, they have been advised to pay more attention to the domestic market.

Nguyen warned that if businesses don’t truly assess the home market, they will lose it.

Tam An

Source: https://vietnamnet.vn/en/vietnamese-fruits-lose-ground-to-imports-could-lose-home-market-2048987.html