Decrease in exports of fruit and vegetable to China, “jump” in Thailand

China ranked first in the import market of Vietnam’s fruit and vegetable. Photo: Nguyễn Thanh

According to the Agro Processing and Market Development Authority (Ministry of Agriculture and Rural Development), in the first seven months of 2020, exports of vegetables and fruit is estimated to reach nearly $2 billion, drop 12.3% over the same period in 2019.

China ranked first in the import market of Vietnam’s fruit and vegetable in the first six months with 59.4% of market share. The export value of vegetables and fruits to this market in the first half of the year hit $1.04 billion, down 29.3% over the same period in 2019.

In the first six months of the year, except China and Singapore which decreased in export value, most of the remaining markets saw increased export value over the same period last year. Specifically, South Korea reached $81.7 million (up 25.5%); Thailand hit $79.4 million (up 234.2%); $77 million (up 9.8%) and Japan reached $68.2 million (accounting for 3.9%, up 13.1%).

In the future, a remarkable point for Vietnam's exported fruit and vegetables is the moves to tighten import regulations from the Chinese market.

According to the Consulate General of Vietnam in Nanning (Guangxi, China), the Guangxi government is strictly implementing a regime of managing goods to markets and supermarkets for consumption; strengthen inspection of documents such as quality assurance certification, certificate of origin and sale order documents for agricultural products used as food.

Besides, it is prohibited to buy, sell and store foods not compliant with food safety standards. In cases of trading imported food, documents on quarantine testing must be provided.

Additionally, from July 1, all means of transport of Vietnam entering China must have vehicle insurance.

Evaluating fruit and vegetable exports in the future, Dang Phuc Nguyen, General Secretary of the Vietnam Fruit and Vegetable Association, said that China still accounted for 60% of the export market share of vegetables and fruits in Vietnam.

Recently, although exports of fruits and vegetables to other markets such as the US, Japan, Thailand and South Korea have increased, it still cannot compensate for the decline of the Chinese market. It is forecast that fruit and vegetable exports may still decline by about 10% compared to 2019 this year.

However, according to Nguyen, in the long run, thanks to new generation free trade agreements, such as the EVFTA and the CPTPP, Vietnamese vegetables and fruits also have many opportunities for high and sustainable breakthroughs in new markets, instead of depending heavily on China.

"The EVFTA opened up huge opportunities in the EU market, which was the largest import market in the world. Specifically, Vietnam could export any type of fruit and vegetable to the EU, as long as the product is made in Vietnam," said Nguyen.

However, the General Secretary of the Vietnam Fruit and Vegetable Association also noted the EU was a "fastidious" market with strict regulations on technical barriers, pesticide residues and banned substances If violating, the enterprise would be returned the goods, causing damage not only to the business but also to the fruit and vegetable industry.

Therefore, safe production following the GAP model is a compulsory requirement. Another problem is that when producing cleanly following standards such as VietGAP and Global GAP, the percentage of vegetables that do not meet requirements in terms of designs and forms for fresh export will increase.

"Deep processing would help the business to take advantage of these products as raw materials for processing, thereby maximising the value of harvested products, helping farmers increase income," Nguyen noted.