Project VIE/61/94
Support to Trade Promotion and Export Development in Vietnam
Sector Export Strategy – Export Marketing Guidelines
Fruit and Vegetable Sector
Export Strategy
Prepared by
Nguyen Thi Tuyet Mai
Mai The Cuong
Submitted to
Trade Promotion and Export Development Project
Vietnam Trade Promotion Agency, MOT
Revised May, 2009
Table of Content
1. INTRODUCTION................................................................................................ 3
1.1. Rationale .................................................................................................. 3
1.2. Approach .................................................................................................. 4
2. THE SECTOR’S VISION AND FUTURE VALUE CHAIN ............................. 5
2.1. The Vision ................................................................................................ 5
2.2. The sector’s future Value Chain .............................................................. 6
3. AN ASSESSMENT OF THE SECTOR’S CURRENT STATUS....................... 9
3.1. Export performance and overall competitiveness.................................. 10
3.2. The sector’s current Value Chain........................................................... 15
3.3. Sector’s performance against Critical Success Factors.......................... 25
3.4. Government policy and strategy in support of the sector ...................... 28
3.5. The sector’s support network ................................................................. 32
4. SWOT ANALYSIS OF THE SECTOR ............................................................ 35
5. THE WAY FORWARD .................................................................................... 37
6. WEIGHTING OF THE STAKEHOLDER PERSPECTIVES .......................... 45
7. RESOURCE MOBILIZATION......................................................................... 46
APPENDIX ............................................................................................................ 46
REFERENCES....................................................................................................... 53
2
1. Introduction
1.1. Rationale
Fruit and vegetables (F&V) sector is an important part of Vietnamese’s diet. The F&V
sector has also a significant contribution to rural development and job creation. The
demand for F&V in both local and foreign markets has been increasing that provides
opportunities for the development of the F&V sector of Vietnam, and also requires
significant improvement of the sector.
At present, Vietnamese fruit and vegetables mainly serve the domestic market and they are
consumed widely in fresh. There is only a small percentage (about 10-15%) supplied to
industrial factories and export, in which export portion accounts for less than 7% of the
total production volume. Export value of Vietnamese fresh F&V has been very modest,
accounting for 2.5% of the sector’s export.
Before 1991, the main export markets of Vietnam were Soviet Union and other socialist
countries. Recently, although Vietnamese F&V are exported to 50 countries and territories
around the word, Asia is a major export market with some leading markets including China,
Taiwan, Japan, Singapore, Indonesia, Korea, Thailand, and Hong Kong. There are main
foreign markets for F&V such as Japan and the US where Vietnam still needs to spend
more effort to penetrate especially with fresh produces although the export value of
Vietnamese F&V to these markets has significantly increased recently (in 2008: nearly
USD 19.5mill. to the US, and more than USD30mill. to Japan) (Planning Department MARD, 2009). In addition, there is opportunity for selected F&V crops with high potential
to export to Europe and the Middle East. In order to be able to successfully export F&V of
Vietnam to these potential markets, the sector needs to overcome many issues/problems
pertaining to supply of raw materials, phyto-sanitary grounds, post-harvest technology, etc.
According to MARD (VNA, 2008), by the year 2010 the Fruit, Vegetable and Flower
Sector plans to set aside 1 million ha of land nationwide for cultivating vegetables and
fruits, out of which 255,000 ha would be used to raise vegetables for the export market. The
production volume by 2010 will reach 24 million tons (10 million tons of fruits and 14
million tons of vegetables), and export value of USD 760 million in 2010 and 1.2 billion in
2020 have been targeted (52/2007/Qð-BNN, 2007). Recently, due to the impact of the
world financial crisis and economic recession, Vietnamese F&V sector has been facing
with many difficulties including those in exporting its products. In the 1st three months of
2009, the export markets have been narrowed down with 10 markets to which Vietnamese
3
F&V could not reach. However, in terms of export values, Vietnam reached over USD407
million in 2008, as the highest value over the past 5 years since 2004(Vinafruit’s report,
2009). For the 1st quarter of 2009, the F&V sector achieved a positive signal of USD95.3
million, increased by 7.8% compared with the same period in 2008
(www.rauhoaquavietnam.vn, 2009).
Although F&V sector has achieved certain success over past years, the sector has still not
made a significant progress in its development. There are still many difficulties and
challenges that the sector has to cope with regarding to the issues associated with priorharvest and post-harvest, especially in exporting F&V. Designing a feasible and
comprehensive sector export strategy has an important role in helping the sector to achieve
the established goals of export, contributing to rural development, job creation and the
Vietnamese’s well-being.
1.2. Approach
ITC1 has developed a 13 step export marketing strategy2. This is fully exercised in the
process of writing the Export Strategy of Fruit and Vegetable Sector (F&V sector).
Analytical Framework
The fundamental process is to ensure private sector leadership and public sector support
with a comprehensive scope as below:
•
Border-In gear: The sector’s supply side must effectively respond to the
opportunity in the international market by (i) reinforcing existing current
capacities; (ii) developing new capacities; and (iii) reinforcing skill and technical
competency and encouraging entrepreneurship.
•
Border gear: The sector’s operating environment must be analyzed including (i)
bottlenecks in trade related infrastructure issues like post-harvest technology,
transportation, handling, calibrating, etc; (ii) trade facilitation issues like
regulations and administrative procedures required by businesses in the sector;
and (iii) costs of doing business such as internet access, company registration, port
fees, inspection charges.
1
The Trade Promotion and Export Development Project is first managed by ITC and then transferred
management to the Vietnam Trade Promotion Agency (Vietrade) at the end of September 2006. ITC still
remains as technical partner of the project.
2
See Export Strategy Design, Sector-Level Strategy: Guidelines for Strategy Makers
4
•
Border-Out gear: The sector’s entry issues to international market can be
analyzed in three aspects (i) market access issues like tariffs and non-tariff
barriers to export products; (ii) In-market support services like information on
international market, contacts at international market, attraction of foreign
investment; and (iii) building the sector’s image and organizing promotional
programs through participation in international fairs, and organizing business
missions.
•
Development gear: The contribution of sector to society must be viewed
including poverty reduction and rural development, environmental protection, etc.
Scope of the Strategy
This strategy covers both fresh and processed fruit & vegetables with more emphasis on
fresh sector3. Fruit and vegetables are defined as the ones in the categories 7, 8 and 20 of
Harmonized Commodity Description and Code System while processed. This strategy
mainly analyzes the sector over the last ten years, especially in the period 2000-2005 and
aims at providing measures for the next 5 years.
Information Sources
In order to serve the purpose of designing the F&V Export Strategy, both secondary and
primary information sources were used. Specifically,
•
Secondary inputs are from reports of MARD, MOIT, UNCTAD/ITC, CBI,
Vinafruit association, and relevant websites.
•
Primary inputs are from stakeholders including enterprises, MARD, MOIT and
support agencies through seminars, interviews, group discussions, and field
studies.
2. the sector’s vision and future value chain
2.1. The Vision
3
“Processed F&V and fresh F&V sectors, whilst sharing similar production bases, are fundamentally
different and the processed sector should be treated as a separate agro-processing sector”. It is interesting to
learn that Vietnamese government has initiated several programs (under MOIT and MARD) to accelerate the
exports of fresh F&V. This part has been considered thoroughly by the writers in order to make full utilization
of the strategy’s final output.
5
In the long run, the fruit and vegetable sector of Vietnam strives for being an
entrepreneurial sector with the export portion increasing to 40% in ten years. In 3 to 5
year’s time, the sector will be able to identify clearly the promising international markets
for selected fresh and processed fruit and vegetables, and organize effectively the exports of
these products to the identified markets. The sector will mobilize the capacities of all
sector’s members in a well-organized and integrated system, and maximize exporting
opportunity while contributing directly and increasingly to job creation, regional and rural
development, and the overall well-being of Vietnam.
2.2. The Sector’s Future Value Chain
The list of potential F&V for exports is recommended based on different perspectives. The
first suggestion is mainly based on (i) the domestic capacity, and (ii) current and past export
to neighboring countries while the latter is based more on international market preferences.
Table 2.1. follows the latter approach. However, these two approaches show overlapping
suggested fruit. Appendix 1 provides more details about potential fruit and vegetables for
export.
Table 2.1. Potential F&V for exports
Fruit: Mango; Pineapple; Dragon Fruit; Persimmon; avocado; Feijoas; Physalis and Tomatillo;
Carambola; Passion Fruit; Tammarind; Mangosteen; pomelo
Vegetables: Asparagus; Fine bean; Runer bean; Snow pea; Mange Tout pea; Baby corn; Okra;
Baby carrot, Chilli, ginger, mushroom, onion, garlic, taro
Sources: Consulting Team (2007)
The future Value Chain of fresh F&V sector and processed F&V sector is presented in
Figure 2.1. The key characteristics of the sectors’ future Value Chain are as follows:
•
More organized growers: Growers are encouraged to form growers’ owned
cooperatives and/or group of growers, and/or material region
•
More involvement of cooperatives in export and export supporting activities
•
Strong linkage between exporters/processors, growers, and trade support
organizations from production to marketing
•
More development of input suppliers including seed, pesticide, training, and postharvest technology with active and practical participation of R&D institutions
•
More efficiency of transportation infrastructure and handling activities
domestically and internationally
•
Market expansion of fresh F&V to EU, the USA, and Japan, of which
6
Netherlands and UAE will be a hub for increasing exports to EU and Middle East
countries.
7
Figure 2.1. The Sector’s Future Generic Value Chain
Note: The white boxes refer to the components which are now already in the current value chain. The pink ones refer to the new components, which should be added to
the future value chain.
Source: Consulting team (2007)
9
3. An assessment of the sector’s current status
3.1. Export Performance and Overall Competitiveness
The domestic consumption is the main consuming source of F&V sector. The export of
F&V sector accounts for a small portion of its total production and production capacity.
In this part, the export performance of F&V sector is reviewed in terms of (i) export
value; (ii) comparison to Vietnam’s total export; (iii) main export items; (iv) main export
markets; and (v) key players. The comparison to main competitors is analyzed in Part 3.3
Export of F&V Sector
The statistical data shows that the export of F&V sector has fluctuated for the last ten
years4. If statistical figure for 2001 is omitted, that becomes gradual increase (Figure
3.1). The increasing trend has been realized over recent years despite the negative impact
of the global financial crisis and economic recession. Specifically, the export values were
USD259 million for 2006, USD305.6 million for 2007, and USD259 million for 2008
(Vinafruit’s report, 2009).
Figure 3.1. F&V Sector’s Export Value 1996-2005
Unit: USD mill
330
350
300
250
235.5
219.7
213.6
179
200
151.5
150
100
105
61
68.2
1996
1997
53
50
0
1998
1999
2000
2001
2002
2003
2004
2005
Source: General Customs Office (2006)
Comparison to Vietnam’s Export
4
Experts say that the figure for 2001 should be seen with caution since the statistical data may not fully
reflect actual export. The introduction of VAT can be used to explain the situation.
10
Agricultural and forest products account for less than 20% of Vietnam’s total export. The
export share of F&V in the agricultural and forest products reduces over the years. The
export of F&V accounts for less than 1% of total export from Vietnam. This is a very
small portion (Figure 3.2).
Figure 3.2. Export Share of F&V in Vietnam’s Total Export
100%
80%
60%
12,461
13,910
16,654
21,151
27,230
330
2,569
219.7
2,800
151.5
3,246
179
4,520
235.5
5,000
2001
2002
2003
2004
2005
40%
20%
0%
Other exports
FV export value
Total export value of agricultural and forest products
Source: Team’s calculation based on data from General Customs Office (2006)
Main Export Items of F&V Sectors
The export of fresh F&V is reducing while that of processed F&V is increasing. Fresh
F&V account for only 2.5% of the sector’s export. Dragon fruit is the main export item
of fresh F&V. Main export items of fresh F&V are as below:
•
Fresh fruit products: Dragon fruit (pitaya), water melon, litchi, longan,
mangoes, mangosteen, rambutan and banana;
•
Fresh vegetables: onion, garlic, potatoes, cabbages, cucumber, taro, pumpkin,
long bean
The main exports items of semi processed and finished products are:
•
Drying/desiccated: coconut, mushroom, bamboo shoot, and litchi, long an, jack
fruit, banana, taro
•
Pickled /in brine: cucumber (gherkin), mushroom, baby corn;
•
In syrup: pineapple, litchi, longan, mangoes;
11
•
Fruit juices: pineapple, mangoes, Guava, litchi, yellow pumpkin, tomatoes;
•
Frozen: spinach, pineapple, rambutan, litchi, and watermelon.
Main Export Markets
Before 1991, 98% of the sector’s export was to the Soviet Union bloc. In the period
2001-2008, export destination is mainly Asian countries. The Chinese market accounted
for the largest share of Vietnam’s export. Markets for Vietnamese fruit and vegetables
export are expanding with more than 50 countries all over the world. Leading markets are
China, Japan, Russia, Taiwan, USA, and EU countries. Table 3.1 presents the top eleven
markets importing F&V from Vietnam in 2008 with the value of over USD10 million.
Table 3.1. F&V export values by countries (2008)
No
Country
Export value (USD)
1
China
48,491,219
2
Russia
38,797,987
3
Taiwan
31,000,521
4
Japan
30,787,022
5
USA
19,447,108
6
Netherlands
12,706,548
7
Singapore
12,423,990
8
Indonesia
12,151,560
9
Korea
10,612,984
10
Thailand
10,463,029
11
Hong Kong
10,211,740
Total
407,037,459
Source: Planning Department, MARD (2009)
Figure 3.3 shows that for the period 2000-2005, in addition to China and other Asian
countries, the F&V sector’s export was expanding to other markets, of which Japan, USA
and EU have become more and more important. This trend has been realized over recent
years.
12
Figure 3.3. The F&V Sector’s Export Market 2000-2005
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2000
2001
Others
2002
Other Asian
2003
China
2004
2005
Japan + USA + EU
Source: Team’s calculation based on data from General Customs Office (2006)
The F&V export to Japan, the USA and EU has been increasing year by year over the
period 2000-2005 (see Figure 3.4).
Key Players
Processed F&V Exporters
Processed F&V players consist of state owned enterprises (SOEs), private enterprises and
foreign invested enterprises (FIEs). Up to the end of 2005, there were 25 SOEs, 127
private enterprises, 7 FIEs in the form of joint ventures, and 10,000 households engaging
in processing business. Equitization process is transforming SOEs into equitized
enterprises.
The main player is the Vietnam National Vegetables, Fruit and agricultural product
Corporation (Vegetexco Vietnam). It has 12 factories nationwide and accounts for 34%
of total country’s production including Dong Giao Foodstuff Export Company (Doveco),
a leading pineapple processor in Ninh Binh. Other names are Vegetigi, Antesco, Da Lat
Agri Foods Co, Kien Giang Export Foodstuff Processing Co, Bao Thanh, Treximco,
Sannam Foodstuff Co, Bac Giang Foodstuff Co.
13
Fresh F&V Exporters
The majority of fresh F&V exporters are small and medium size enterprises. Leading
players are Vegetexco I, Vegetexco Hochiminh city, Hoang Hau Co.Ltd, Fruit and Green
Co, Da Lat Agri Foods Co, VietFruitCo, Vegetigi, and Antesco. The list of dynamic
players is updated on http://www.vinafruit.com.
Figure 3.4. The F&V Sector’s Export Market 2000-2005
25
22.1
21.5
20
19.2
16.7
15
10
14.5
9.2
Japan
USA
11
EU
8.1
5.9
5
0
14.9
14.7
13
2.2
1.2
2000
2
2001
2002
2003
2004
Source: Team’s calculation based on data from General Customs Office (2006)
Overall Competitiveness
Neighboring countries like Thailand, China, Malaysia have established their names in
selected F&V in the EU market. For example, Malaysia accounted for 46% of passion
fruit imported by the EU in 2004. Thailand has large market shares for papayas (4%),
tamarinds (7%), sweet maize (67%), asparagus (8%), capsicum (2%). China has its name
in pears (4%), onions (24%), truffles (85%), and mushrooms (16%) (see details in
Appendix 2).
Except the export of Dragon Fruit, other F&V exports from Vietnam account for small
share in the world market. For example, it is hard to find Vietnam in the group of leading
exporters to EU market (Appendix 2). Vietnam’s total export value for F&V to selected
EU member is presented in Table 3.2. Vietnam’s export value is too small compared to
total F&V import of EU countries.
14
Table 3.2. Vietnam’s Total Export Value of F&V to Selected EU Members
Import value of fruit
Import value of vegetable
(EUR mill)
(EUR mill)
1
Germany
3,600
2,600
2
UK
2,500
1,900
3
Netherlands
1,800
787
4
Belgium
1,900
459
5
Spain
675
161
6
Italy
335
464
Note: Figures for EU were in 2003 while those of Vietnam were in 2004.
Source: EBI quoted from Eurostat (2005)
No
Country
Vietnam’s total export
value of F&&V (USD mill)
4.9
1.1
5.9
0.89
0.36
3.2
3.2. The Sector’s Current Value Chain
This section presents the current generic value chain of Vietnam’s vegetables and fruit
sector. A brief description of the current value chain is shown in Figure 3.1. Key players
in the value chain (mainly focusing on national components), their roles, characteristics
and the linkages among them are explained in the following.
Growers
The horticulture sector in Vietnam is dominated by relatively small-scale producers who
grow and supply primarily for the domestic market. The export volume accounts for only
small percentage in total output.
Production scale is small with sizes varying from 0.5 to 2 ha per household in fruit
growing. It is concentrated on dragon fruit (Binh Thuan province, Tien giang and Long an
provinces), pineapple (Ninh Binh, Bac giang, Kien giang and Tien Giang provinces), longan
(Tien giang, Ben tre and Hung yen provinces), litchi (Bac giang provinces), Grape fruit
(Vinh long, Tien giang).
Recently, thanks to farm development incentive policy, there are more and more
horticultural areas established with bigger sizes in Northern mountainous midland,
Western Highland and Mekong River Delta. For instance, there are several plantations of
pineapple ranging from 2,000 to 5,000 ha each based in Ninh Binh, Tien giang, Kien giang,
Binh Phuoc provinces and Ho Chi Minh City’s outskirt. Main investors are state owned
entities.
With regard to vegetables, they are often grown in house gardens or in concentrated
horticultural areas, which have smaller sizes varying from a few hundred squared meters
15
to 1 ha per household. In the campaign of developing farm economy, the individual
growers are encouraged to join farming clubs, co-operatives, farming societies and
associations. However, the number of growers joining these organizations is still limited.
There are 2 big regions growing vegetables in Vietnam, in which, Red River Delta
counting for 26% and Mekong River Delta 25%. The various main kinds of vegetables in
Mekong Delta River are Convolvulus (Impomoea acquatica, impomoea reptan), Straw
mushroom (Volvarielle volvacia), Dried fungus (Auricularia polytricha), Amaranth (red
and green), Basella, Basil (Ocimum basilicum), Snap (phaseolus vulgaris), Wing bean
(Psophocarpus sativus), Yard long-bean (vigna sesquipedalis), Bean Sprout (phaseolus
radiatus), Bsillies, Cabbage (Brassica oleracea), Chinese cabbage (Brassica pekineusis),
Caladium (Colocasia odora, antiquorum), Celery (Apium graveolens), Chayote (sechium
eduale), Chive (allium schoenoprasum), Chrysanthemum garland, Cockscomb mint
(Elsholltzia ciliata), Coleus Amboinicus, Coriander (coriandrum sativum), Cress
(Nasturtium officinale), Eggplant (Solanum melongea) White small eggplant, Fennel
(Foeniculum dulce), Gourd (cucurbita), Bitter gourd (Momordica balsamina), WaxGourd (Benicasa hispida), Houttuynia (Houttuynia cordata), Hyptis suaveolens, Leaf
mustard (Brassica juncea), Leptodactyl plant (piperomia leptostochia hook), Luffa, Mint
(Mentha), etc.
Main kinds of vegetables grown in Red River delta are cucumber, gherkin, potatoes,
bamboo shoot, mushroom, chayote (sechium edule), Kohl-rabi (brassica caulo rapa),
Luffa, Champinion (Agaricus bisporus) Flamm, Lentinus edodes, Oyster mushroom,
carrot, tomatoes, Convolvulus, baby corn, white small eggplant, Gourd, Cabbage, etc.
Western highland with total 44,000 ha is specialized in producing and supplying high
value vegetables to Ho Chi Minh City and exporters including Spinach, Chinese Kale,
Red winner cabbage, Butterhead lettuce, Potatoes, Mushroom, Tomatoes, Onions,
Japanese leek, Broccoli, Globe artichokes, Taros, Tubers, etc.
Fragmented and small-scale production base are making sourcing of consistent quality
and maturity difficult. There are some more characteristics associated with the current
growers in V&F sector as follows.
•
Although awareness of growers/farmers about quality and food safety in
producing vegetables such as Spinach has increased, there is generally still lack of
understanding of modern cultural practices that could lead to low productivity,
low yields, high unit costs and serious latent disease problems in producing
V&F.
16
•
Poor Post Harvest Practices that lead to bruising and skin blemishes and short
shelf life.
•
No dedicated cold storage facilities offering controlled atmosphere (C/A)
storage, ethylene and C02 scrubbing.
Few
long-term
contracts
between
the
growers
and
collectors/exporters/processors, and less commitment from the growers in
implementing product supply agreements. The mode of direct document
agreement signed between the grower and the processor is in limit except a
small part of raw pineapple, cucumber, tomatoes and high value vegetables
supplied for processing exporters. According to IFPRI’s report, there is 16% of
investigated farming householders have signed direct document agreement with
the buyers, in which pineapple and tomatoes raw material accounted for 80% of
the total.
•
The above analyses suggest some changes for improvement in the future such as
rationalizing the production base through encouragement of larger units or plantations;
organizing growers into co-operatives that could develop into large co-operative export
houses. This could help increase production yields, ensure consistent product quality, and
contribute to rural/regional development.
Collectors/Intermediaries
The distribution chain in V&F sector is
involved with too many intermediaries
playing a key role in collecting V&F from
the growers and then do packing and
transportation to market, including selling
to exporters/processors.
Specifically, raw fruit and vegetables are
Source: Taken from Higginson (2006)
purchased directly from growers to small
private intermediators who are often earn money by re-selling to other private
intermediators or / and processors or/and exporters or / and fruit, vegetables shops. Not
only does this add to cost but it also causes too many breaks in the cool chain, excessive
handling and deterioration in final product quality. This way may be acceptable for
processing but excessive handling, breaks in the cool chain and the resulting deterioration
17
in quality make such sourcing unsuitable for export marketing, especially for exporting
fresh V&F. Excessive handling through collection by intermediaries can cause
inconsistent product quality and source of latent quality defects that may not be apparent
until arrival at port of destination.
Briefly, some main problems associated with the current collectors are presented below
and suggest the need to re-organize theses players in a more systematic and efficient way.
•
Poor Post Harvest Practices that lead to bruising and skin blemishes and short
shelf life.
•
Lack of cool chain from field to pack-house causing unnecessary quality
deterioration.
•
No dedicated refrigerated export pack-houses equipped with pre-cooling,
hydro/vacuum cooling and cold stores.
•
No dedicated cold storage facilities offering controlled atmosphere (C/A)
storage, ethylene and C02 scrubbing.
Processors/exporters
The development of the sector has in the past focused on the supply of raw material to
the many fruit and vegetable processing and freezing factories. Many of these factories
are equipped with modern machinery and equipment, and most have adopted quality
management certification (ISO 9001 and HACCAP). The management of these factories
are well conversed with the Quality Standards required by prospective importing
countries particularly in minimal chemical residues (MRL’s) and Good Agriculture
Practice (GAP).
There are many small enterprises producing preliminary or finished fruit and
vegetables by means of drying, frying, quick individual frozen. According to
statistical reports of 35 provincial government, there are 25 state-owned
enterprises, 7 joint venture enterprisers, 129 private enterprises and over 10,000
house-holds doing fruit and vegetable processing. However, many fruit and
vegetables processing factories of Vietnam have not used fully registered capacity
due to shortage of raw material. According to report issued from steering
committee of Planning of Developing Production Sector which belonging to
MARD, fruit and vegetable processing factories of Vietnam only reached 20-25%
18
compared to installed capacity, the highest level can be reached just about 40 –
50% (Doveco factory, 5 Kiveco factory, Dona New tower factory,etc.). In
particularly, there are factories reached lower than 10% such as VEGETEXCO
Haiphong factory, and Bac Giang factory.
A major problem facing the processing
factories is how to get the regular and
consistent supply of raw material. This
applies particularly to the factories situated
in the city away from the production areas
and who are reliant upon raw material
sourced either directly from growers,
intermediary agents/brokers, or the wholesale market. Contracts with growers appear
unenforceable and growers regularly divert product to the wholesale market when prices
are higher than the contracted price. Therefore, these factories appear reluctant to risk
investment in farming or in providing seed and planting material for contracted farmers
to secure supply of raw material. The factories situated in the growing areas are more
fortunate in that most were part of the old state farm system and enjoy an integrated
plantation. The plantations have reverted to individual small farmer ownership but the
farmers are organized and advised by the technical staff of the factories and managed as a
plantation.
Source: Taken from hoanghau.com.vn (2006)
Another issue which needs to be addressed in future to improve efficiency of V&F
processors referring to reducing can’s cost. Currently, can’s cost accounts for about 40%
of the total costs that seem to be not reasonable.
With regard to fresh fruit exporters, they need to be dynamic and responsive to the
market on a daily basis and very much aware of the cool chain and storage demands and
importantly, responsive to supply deadlines.
Although there are numerous private exporters mainly engaged in cross border trade with
the possible exception of specialized Dragon fruit exporters, there appears to be few
dedicated fresh produce export houses. Export houses that do handle fresh produce have
inadequate cold/cool stores some relying on storage in sea freight refrigerated containers
as additional storage. This is a common practice worldwide and is a major cause of
rejected produce. The practice is based on a common misunderstanding that
“temperature” is the dominant parameter for storage assuming that product loaded into a
19
container at say 50C will reduce to and stay at this temperature. Fruit continues to respire
and generate heat and this heat has to be removed to maintain the ideal storage
temperature. A container is designed to maintain the temperature of the fruit loaded not
extract the heat of respiration thus, warm respiring fruit loaded into such a container
could in fact increase in temperature despite the refrigeration maintaining an ambient low
set temperature. Furthermore most fruit need humidity control, ethylene and O2
scrubbing to maximize storage life. Such equipment along with pre-cooling is considered
a pre-requisite for successful fruit and vegetable exporting.
The combined problems of sourcing raw material from a fragmented production base for
processing and developing dedicated fresh produce export/packing organizations could
be resolved by encouraging growers to form grower owned co-operatives that could
develop into the role of specialized export houses. The co-operative could provide
planting material, chemicals and fertilizer at lower cost because of their buying power,
share machinery and offer technical assistance. Individual growers, as members, would
each benefit from the activities of the co-operative and receive dividends from trading
profit. The co-operative pack-house could provide the pre-cooling, packing and cold
storage facilities and export market the packed products under a single brand.
Seed, Fertilizer, Pesticide and Packaging Suppliers
The essential inputs like fertilizer, seeds, planting and packaging materials are plenty and
available in local market. Almost all of these materials originated from import, which can
be purchased and sold freely in local market. Sometimes, shortage of packaging materials
need to overcome by using imported sources. This has happened in several packaging
factories and had contributed to higher production costs. The fresh V&F exporting to
China (border trade) is mainly packed by local package materials as bamboo basket,
banana leaves, straw, etc so it has undergone quite a loss.
Seeds are available in Vietnam from various sources with different quality. However,
Vietnam is still struggling with development of high yielding crops and high quality
seeds for V&F sector. This issue needs to be improved in the future to help production of
V&F become more efficient. The sector also lacks indigenous fertilizer/chemicals
causing high input production costs.
20
Training Suppliers
In general, growers lack knowledge of modern cultivation practices that could lead to
low productivity, low yields, high unit costs and serious latent disease problems. This
suggests a need for improvement in future.
The standard of cultivation in terms of weed and pest and disease control and crop stands
in general appears good. However, there is a concern about an apparent lack of
knowledge on crop rotation and the consequences of mono cropping, a practice that
appears common in the vegetable producing areas. The latent problems of nematode and
general “soil sickness” associated with this practice could cause problems in the future
and needs further investigation.
Technology/Know-How Suppliers
Anecdotal evidence suggests that there are good University and Research Institutions in
Vietnam, but there are indications that research and development is not being applied to
the field. As Vietnam is distant from the major importing fruit and vegetable markets,
and as the local varieties are not favored by these markets, key areas of research are the
introduction of new high yielding varieties and cultivars and post harvest practices such
as new seeds, cooling technology of preservation, and efficient methods dealing with
disease problems.
Considerable investment has been made in Vietnam in logistics. The cool chain logistics
from factory to port are generally good but these have focused on the frozen fish sector.
There is a great risk that fresh fruit and vegetables could be contaminated by fish
products, and in the absence of dedicated fruit and vegetable stores there is a possibility
that fresh fruit and vegetables could be frozen. Many fruit evolve ethylene gas in storage
that could adversely affect the quality of other fruits and vegetables particularly fruits
such as Kiwi and possibly Dragon Fruit also. Thus, a full and better understanding of the
post harvest and storage factors is essential for export success. This suggests that in the
future know-how/ technology suppliers may need to address this issue.
Transporters
Implementation of transportation V&F from farm to processing plant/packing house is
carried out mainly by small trucks (Red River Delta, Highlands and Mountainous
regions) or by boats (Mekong River Delta). V&F transporting to neighboring countries
21
(Thailand, Cambodia, Laos, and China) can be used by lorry. From the South of Vietnam
to Chinese border it can be transported by lorry, train and sea. Main exit seaports are
Saigon port (South of VN), Danang port (in the Centre of Vietnam) and Haiphong port
(in the North of Vietnam). Main airports are Tan Son Nhat (in the South), Danang (in the
Centre), and Noi Bai (in Hanoi).
There are wide ranges of shipping companies, forwarding agents, air shipping companies
present at Vietnam ready to offer services but their freight cost is often a little bit higher
than freight cost from Thailand. Generally, air cargo and container space are available for
exporters but service charge is higher. One reason why freight is higher could be that
transporting volume in two ways from and to Vietnamese ports is often less than it from
Thailand.
Importers
At present, V&F sector mainly focuses on exporting the products to China and Asian
countries due to advantages in terms of close distance and reasonable requirements. In
addition to some traditional markets, in the future the sector may want to consider
selected products to export to the major importing markets such as EU, the US, and reexport markets.
Briefly, on the bases of the above analyses of the key players in the value chain, various
areas need to be considered when developing the future value chain of the V&F sector.
These include changes made to improve the efficiency (e.g., establishing co-operatives,
developing larger production units, increasing efficiency of seed suppliers, and reducing
the can’s cost); minimize leakages (e.g., setting up closer links between knowhow/technology suppliers and growers/exporters/processors, doing packaging for fresh
V&F); add value (e.g., adding Quality Certification and Re-packaging); create value
(e.g., adding new markets for exports, and entering new value chains. These changes are
reflected in the future value chain that was presented in previous section.
Illustration of the Current Value Chain of Selected Fruit & Vegetables
Fresh Dragon Fruit
Binh Thuan province, Long An province and An Giang province in the South of Vietnam
are main growing areas. Dragon fruit is planted in large concentrated scale and area. This
is different from growing characteristics of fruit and vegetables in Vietnam, which are
22
fragmented.
Main international markets for Vietnamese dragon fruit are Hong Kong (China),
Germany, France, Netherlands, Singapore, and Malaysia.
Table 3.3. Value Chain of Fresh Dragon Fruit (main season time from April to September)
No
Participants
Price
(VND/kg)
Cost
(VND/kg)
Percentage in
total product
value
1
Growers
4500
3644
3.75%
Fertilizers, plant protection
1563
1.30%
Labor
375
0.31%
Irrigation, water pumping system, electric
devices, electricity, warehouses, etc
1025
0.85%
Banking interest
72
0.06%
Management fee
75
0.06%
Depreciation
534
0.45%
Value Added
856
0.71%
2 Intermediator/Packer
6850
6350
5.71%
Price buying from farms
4500
3.75%
Harvesting cost
80
0.07%
Local transportation cost
100
0.08%
Washing, calibrating, treatment,
labelling,packing,stevedoring
200
0.17%
PE bags, PP tape, washing resolution
250
0.21%
Carton box
850
0.71%
Chill storage (electricity, handling cost)
170
0.14%
Management fee
50
0.04%
Banking interest, depreciation, others
150
0.13%
Value Added
500
0.42%
3 Exporter
9536
8036
7.95%
Buying price from intermediator
6850
5.71%
Transporting from packing house/chill storage to
container yard
200
0.17%
Labeling
302
0.25%
Handling, stuffing, inspection, customs clearance
154
0.13%
Management fee
250
0.21%
Banking interest
280
0.23%
Value Added
1500
1.25%
4 International transporters
4611
3000
3.84%
Value Added
1611
1.34%
Importers and foreign distribution
5 (EU market)
120000
94147
100.00%
CIF price
14147
11.79%
Other expenses
80000
66.67%
Value Added abroad
25853
21.54%
Source: Team's calculation based on report from Pham Thi Tuoc and Dinh Van Huong on dragon fruit of Binh
Thuan province (2006)
23
China and Thailand are competitors in recent years. However, both countries still import
from Vietnam. Vietnamese exporters export fresh dragon fruit by air and sea
transportation.
24
Figure 3.1. Current Generic Value Chain of processed F&V and fresh F&V sectors
Source: Consulting team (2007)
25
3.3. Sector’s Performance against Critical Success Factors
The F&V sector’s ability to respond to buyers’ preferences or the Critical Success
Factors (CSFs) can be analyzed in all markets and individual market. Factors to be
examined include (i) on-time delivery; (ii) taste; (iii) quantity/volume; (iv) size; (v)
phytosanitary; (vi) quality; (vii) brands and trademarks; and (viii) price.
Export of Vietnam’s F&V sector must compete with exporters from Asian region
including Thailand, Philippines, China, Taiwan, Australia and others including Israel,
African, and South American countries.
Main products exporting to distance markets, which are the USA, EU, Russia are
industrial products such as Canned fruit, IQF fruit, Pickled vegetables, Dried fruit,
Concentrated fruit juices, etc. All of these can remain in good quality over long voyages.
The quality of F&V is directly resulted from seed, cultivation, preservation and
transportation. Processed F&V exporters face problem of seeds, which result in low
productivity and unreliable quality.
Exporters of fresh F&V face problem of maintaining good quality of F&V to markets
like EU, the USA resulted from (i) far distance to the market; and (ii) weak post
harvest technology.
EU buyers require on-time delivery; and good quality. In order to satisfy concept of
good quality, exporters should follow strictly GAP. The main problem is how to
maintain good quality of the fresh product to this market. The far distance from
Vietnam to EU causes this problem. For example, Vietnam even faces difficulty to
export fresh dragon fruit, the leading export item. Its main markets are China, Taiwan,
Singapore, Indonesia, and Malaysia. Currently, export of dragon fruit to Netherlands,
Germany, and France, etc accounts for a very small ratio of the total dragon fruit export.
It takes about 15 days to deliver dragon fruit from Vietnam to EU. The dragon fruit then
must be kept in supermarkets from 7-10 days. Totally, it takes about 25 days to deliver
dragon fruit from Vietnam to end-users in the EU while dragon fruit normally maintains
good quality for 20 days. With the participation of Thailand and Malaysia in the world
export of fresh dragon fruit, Vietnam must solve this problem. Interviews with businesses
show that Thailand exporters enjoy an airfreight subsidy of over 30%. To solve this,
preservation and delivery time are the main things to work on for Vietnam. Netherlands
and Belgium, especially Netherlands can be a good choice for selection of gateway to the
26
EU since Netherlands is a major importer of horticulture products many re-exported
throughout Europe and the Netherlands would thus appear to be the gateway to Europe.
The brands and trademarks of products from Vietnam are not familiar with
international markets. Customers know more about South American countries and other
Asian countries like Thailand and China. Exporters from these two countries are dynamic
and experience with Japanese market, American market, Australian market, Hong Kong
market and Singaporean market.
EU, Japan, and the USA require strict practice of GAP. Vietnam has not yet signed
animal and plant quarantine agreements with Japan, USA and Korea. This prevents
exporters from expanding its market share in these markets. Japanese market even
requires exporters to buy machinery from Japan to ensure the quality of products. In
addition, exporters must provide uniform size and stable volume of exports.
Mutual trade of fruit and vegetable between Vietnam and China and has been mainly
conducted through border-trade by private sector since private sector can be flexible to
fluctuation caused by bordering provincial authorities of China. In the Chinese market,
the CSF is price. Thailand has recently enjoyed free access to the Chinese market with
import tariff at 0% while that of Vietnam was still at 12-14% until January 1, 2006. It
causes reduction of Vietnam’s F&V export to China. However, this is only one factor of
competitiveness. Vietnamese exporters are exporting to China independently or
“everyone for himself”. Vietnam exporters are unorganized and often in weak position
against Chinese buyers.
Off-season supply is a demand from China, EU, Russia and North America. Vietnam
has advantage in doing this since it enjoys a wide range of natural climates ranging from
the humid tropics in the south to a temperate climate in the north and at elevation in the
southern and central regions. Thus the country can produce a full range of F&V crops
required by the international markets.
Finally, exporters of both processed and fresh F&V face problem of higher price
resulted from (i) high cost of materials; (ii) high cost of transportation; and (iii) low
productivity of F&V. Interviews with exporters show that the price of banana from
Vietnam is 10% higher than that from Philippines; production cost of canned pineapple
of Vietnam is 10% higher than that of Thailand. Clearly, we must have comparative costs
with Thailand and Philippines etc. and the reason for the higher costs. We compare key
27
cost factors among Vietnam, Thailand, and China in Appendix 3.
The below case study illustrates two critical success factors for exports of fresh dragon
fruit to the EU.
Case study. Export of Vietnam’s fresh dragon fruit to the EU is affected by transport
cost and limited range of varieties
EU market imports 4 main groups of the fresh dragon fruit, with 15 varieties. Red-peel and
white-flesh dragon fruit are mainly imported from Vietnam and Thailand. EU also imports
red-peel, white-flesh fruit from Israel, Malaysia; red-peel, violet-flesh fruit from Guatemala,
Nicaragua and Ecuador; yellow-peel, white-flesh fruit from Columbia, Ecuador and Israel.
Netherlands, France, Germany and UK are leading importers of dragon fruit in the EU. The
first three countries re-export to other EU members.
Vietnam exports 700 tones of red-peel, white-flesh dragon fruit to the EU annually. This
accounts for 40% of this niche market. Thai and Israeli fresh dragon fruit account for 18%
and 42% market share of the niche. Major importers of Vietnamese dragon fruit are Bud
Holland, TFC from Netherlands, Exofarm, Dang, Drevin, Tang Freres supermarket system
from France, Weichert from Germany and Utopia and MWW from the UK.
Vietnam transports fresh dragon fruit to EU mostly by airplane. The B777 aircrafts carry
Vietnamese fresh dragon fruit four times per week to EU at the transport cost at US$ 3/kg.
Thailand and Israel transport their fresh dragon fruit to EU at the transport costs at US$ 22.5/kg and US$ 1/kg. Vietnam’s market share is decreasing due to less competitive price.
Vietnamese dragon fruit is bland while EU consumers prefer sweet or sour fruit. Vietnamese
red-peel and white-flesh dragon fruit are reducing market share to yellow-peel and other
white-flesh fruit from Thailand and Israel.
Source: Vietnam Economic News, “Increasing buyers of Thanh Long fruit”, available at
http://www.ven.org.vn/view_news.php?id=4788
3.4. Government Policy and Strategy in Support of the Sector
Over the past years, Vietnamese government has devoted a certain effort to create
favorable conditions to encourage the development of agricultural industry including
fruit and vegetable sector. This is briefly presented in the following.
Land Policy
The most important policy changes in agriculture over the last few years refer to land
28
policy. Amended Law on Land (came into force since 01 July 2003), has institutionalized
and extend land use rights. This encourages farmers to invest in long term production, to
move or change the plant structure in order to effectively develop production. For
example, farmers can move from rice to fruit tree, from coffee to fruit tree, etc. This
helps step by step to create larger production units or farms of producing fruits and
vegetables.
Circular No 95/2004/TT-BTC, issued by
Ministry of Finance, provides guidance on
implementing some financial support policies
and tariff preferences to develop material
regions and processing industry for
agricultural, forestry, marine products and salt.
Circular No.35/2001, issued by Ministry of
Finance provides guidance on the payment of
land rent, contribution to joint venture entities by right of land use of organizations,
households and individual.
The above policies have facilitated the development of material regions to make it
possible to export fruit and vegetables in great volume. By these preferential provisions,
enterprises and individuals will have more opportunities to invest in growing fruit and
vegetables.
Taxation Policy
Business Income Tax Exemption and Reduction
According to the Circular No. 18/2002/TT-BTC promulgated by Ministry of Finance, the
investors will be exempted from business income tax within the first 2 years and
continuously reduced up to 50 percents within the next 3 years such as growing perennial
fruit trees in fallow regions or in bare hills or mountainous regions or preservation and
processing industry and breeding, etc. As for the new established farms or enterprises in
mountainous regions, they can be exempted from business income tax within first 4 years
and continuously reduced up to 50 percents for next 7 – 9 years.
V.A.T (Value Added Tax) Exemption and Reduction
29
According to Circular No.91/2000/TT-BTC issued by Ministry of Finance, enterprises
can be exempted from V.A.T and business income tax when they make circulation of
agricultural products in order to encourage crop products consuming.
Land-tax Exemption and Reduction
According to Resolution No.15/2003/QH11 issued by National Assembly, growers have
been facilitated by agricultural land tax exemption and reduction.
Other Financial Policies
Policies on Consumption Encouragement
The government issued Decision No 80/2002/Q_-TTg dated 24/06/2002 encouraging
business parties to purchase crop goods / commodities through written contracts.
Pursuant to this Decision, the government encourages enterprises to contract agricultural
products consumption directly with growers, cooperatives, and farm households,
connecting crop sources to processors as well as final consumers so that production will
be more stable and sustainable. However, the actual implementation of this Decision
causes difficulties to exporters.
Growers / producers and enterprises who signed consumption contracts or have
production / processing projects for export will be granted in investment support from
Development Support Fund at preferential interest rate (lowered than as usual).
Enterprises which directly sign the consumption contract and do business for export will
be authorized to get loans from Export Support Fund and can use the asset created from
this as security for the loans.
Policies on Domestic Market Development
The Government issued Resolution No 02/2003/N-CP dated 14/01/2003 on the
development and management of markets, and the Decree No 311/Q-TTg dated
20/03/2003 on approval of a scheme for organizing domestic market and concentrating
on developing rural trade to the year of 2010. One of the main issues mentioned in these
documents refers to consolidating and developing the local market infrastructure such as
building up wholesales markets, commodity exchanged bases, etc. Some of regions are
carrying out this program such as Tien Giang province, which is investing in fruit,
30
wholesales market, and Dalat city, which intends to build up the fresh flower auction
center.
Policies on Encouraging Vegetables and Fruit Export
Exporters will be granted V.A.T refund and export reward if achieving great-added
export value.
Fresh and processed vegetables and fruit export to such markets as USA, EU, Japan,
China, Russia, Eastern Europe and Korea will be given priority in the trade promotion
programs (financial support for joining international exhibitions, for marketing training
courses, etc.)
Trade Promotion and Other Support Policies
Similar to other exporting sectors, fruit and vegetables exporting sector also receives
certain support from the government in terms of trade promotion. For instance, recently,
the government has eliminated some procedures and fees related to exports. The
government also has some regulations encouraging exporters to expand the markets for
exports.
The Government’s Commitments to Free Trade of Vegetables and Fruit of Vietnam
As current tariff of MFN, vegetables and fruit tariff have been protected from medium to
high: 30% for fresh vegetables and fruit, 40% - 50% for processed vegetables and fruit.
ASEAN Free Trade Area (AFTA)
Fresh vegetables and fruit belong to the list of Common Effective Preferential Tariff
(CEPT). Although processed vegetables and fruits have been placed on temporary
exclusive tariff list scheduled to be reduced more slowly compared with fresh F&V,
since January 1, 2006 tariff for all F&V has been reduced to 0-5 percent. Being a member
of AFTA has been directly affecting vegetables and fruit export, and therefore
influencing the development of this sector. The impact of AFTA depends much on the
competitiveness of Vietnam’s vegetables and fruit compared with those from other
regional countries. Besides, the impact of AFTA also can be seen in the difference
between prices of imported goods and domestically produced ones because tariff
reduction, simplification of trade, sanitary and phytosanitary procedures will reduce the
31
prices of imported commodities. Other factors such as quality standards and models will
also change under the competitive pressure from AFTA membership countries.
ASEAN-CHINA Free Trade Area (AC-FTA)
Early harvest Program (EHP) has been expedited since 2004, agricultural products listed
on 8 beginning chapters of tariff those chiefly fresh vegetables and fruit, preliminary
processed fruit and vegetables and flower varieties (Chapter 6, 7 and 8). For fresh F&V,
Vietnam has enjoyed tariff of 0% since 01/01/2006. For processed F&V, tariff will be
reduced to 5-0% by 2009.
WTO
At present, Vietnam is a member of WTO. It has been under way to negotiate opening
market of agricultural products with many countries. There are many members,
especially countries that have strong agricultural export products such as Australia, New
Zealand, and Brazil asking for tariff reduction of agricultural products. Therefore,
Vietnam will have to continue opening local market largely for importing vegetables and
fruit from overseas. Joining the WTO creates big opportunities for Vietnam to export
worldwide. However, Vietnam has to compete with the countries, which are more
developed in production such as Thailand.
Briefly, integration to regional trade or/and global trade has been opening great
opportunities as well as challenges for vegetables and fruit sector of Vietnam. Although
the government has been spent considerable effort to support the V&F sector, including
support for exporting vegetables and fruits, more effort are needed and desirable
regarding providing more market information, enhancing the quality of R&D institutions,
and building necessary infrastructure supporting export V&F.
3.5. The Sector’s Support Network
The sector’s support network involves various organizations including ministries, donors,
associations, institutions, etc. The following activities and issues provided by these
relevant organizations are examined (i) seed development; (ii) production technology;
(iii) post harvest technology; (iv) training service; (v) trade information; (vi) trade
finance; (vii) export quality management; and (vii) other logistics.
•
Ministry of Industry & Trade (MOIT): MOIT/VIETRADE has designed
32
national export strategy of F&V sector. VIETRADE has run the national export
campaigns since 2003. The campaigns’ activities include trade information,
training, market survey, exhibition, branding, export centers development, and ecommerce development. Vegetexco and Vinafruit are implementers of the
campaign in F&V sector. In the year 2006, the trade promotion budget from the
campaign to these two organizations is approximately VND2.3 billion. In 2008,
MOIT together with GTZ and Metro project organized training courses on
production management to Global GAP standards; 02 market studies to Singapore
and EU were conducted; support for developing and promoting Vinafruit’s website
was provided (Vinafruit’s report, 2009). In 2009, the national trade promotion
program plans to spend over VND1 billion for Vegetexco to participate in Summer
Fancy Food Show 2009 (Vietrade, 2009). These activities have helped exporters
access/expand international markets. However, the support is still modest and
beneficiary exporters are limited mainly in members of Vegetexco and Vinafruit.
•
MARD (Ministry of Agricultural and Rural Development): MARD develops
F&V sectors through agricultural promotion programs, applying GAP, developing
post harvest preservation programs, upgrading varieties programs, protecting from
fruit-fly programs, developing cultivated technology programs, quarantine
agreements negotiations, etc. Implementers are institutions under MARD. The
development of post harvest technology is slowly. Feasible projects are still
lacking. The cultivated technology is well organized by regional departments of
agricultural and rural development. These departments issue guidebooks and run
marketing campaigns.
•
MONRE (Ministry of Natural Resources and Environment): MONRE proposes
investment incentives related to land and waste water treatment procedure. It speeds up the
administration reform. Interviews show that land renting rates should be more diversified.
•
MOF (Ministry of Finance): MOF is in charge of tax incentive, loan interest
incentive, import tax for vital importing packaging materials. VAT and income tax
are high. In addition, while local tinplates (for empty cans) could not have been met
the local demand but importing tariff from overseas is still high.
•
VFA (Vietnam Fruit Association): It provides information, petition to
government, safety F&V propaganda, technical training activities, and trade
promotion activities to its members. Its activities are still modest due to limited
budget.
•
Institutions: There are numbers of institutions involved in promoting production
and export of the F&V sector including RIFAV (Vietnam Research Institute of
Fruit and Vegetable), SOFRI (Southern Fruit Research Institute), IAE (Institute of
33
Agricultural Economics), NIAP (National Institute for Agricultural Planning),
VIAEP (Viet Nam Institute of Agricultural Engineering Technology), VASI (Viet
Nam Agricultural Science Institute), HAU (Hanoi Agricultural University), HUT
(Hanoi University of Technology), UAF (University of Agriculture and Forestry,
HCM), Can Tho University, RIAE (Research Institute for Agricultural
Engineering). These institutions bid for research projects funded by MARD and
international donors. However, only RIFAV and SOFRI are clearly recognized by
enterprises in the F&V sector.
•
International Donors: ITC/Swiss-Sweden (funded this strategy drafting), USAID,
AusAID, SIDA, DANIDA, JICA, ADB, GTZ, etc provides technical and financial
supports to agricultural and rural development including training to participants in
value chains, and providing trade information. EUREGAP project (European
Retail Produce Good Agricultural Practices) for dragon fruit co-funded by USAID,
AusAID has trained farmers on EUREGAP protocols, enhanced SPS awareness
among industry’s stakeholders, provided post harvest handling techniques.
•
Business Associations and Trade Representative Offices: VCCI (Vietnam
Chamber of Commerce and Industry) provides business training services to
participants in the value chain and market access information. VCA (Vietnam
Cooperatives Alliance), VARISME (Association of Rural Industry and Small and
Medium sized enterprises in Vietnam) also provide training services to farmers and
information on agricultural production. The trade representative offices of Vietnam
in foreign countries and trade representative offices of foreign countries in Vietnam
provide trade information, business forums and workshop. However, these
activities are not yet popular in F&V sector.
•
Financial Support Funds: Credits for farmers and rural development are
conducted by Agribank (Agricultural and rural development bank), Bank for Social
Policies, and the People’s Credit Fund. Other sources that can provide financial
support to F&V sector include Development Bank, the National Scientific and
Technological Development Support Fund, National Fund for Job Creation, Fund
for Rural Industrial Extension. Information on activities and conditions to use these
financial support funds need to be disseminated more.
34
4. SWOT ANALYSIS OF THE SECTOR
Below is the summary of the sector’s SWOT analysis.
Strengths
Weaknesses
Wide range of climates >>> ability to
produce full range of F&V
•
Far distance to EU and the USA
•
Relatively high cost of inputs
•
Hard working and low cost labor force
•
•
Relatively good infrastructure (roads, ports,
Cost of materials is higher than China,
Philippines, Thailand, Taiwan, etc from 2 – 5
water irrigation, electricity)
times
•
•
•
Good recognizing/understanding of quality
•
Most of the processing factories are working
management certification (ISO 9001,
far from its full capacity while Thai
HACCAP) and quality standards (MRL’s and
GAP)
processing factories are able to operate at full
capacity
Experience in supplying a year round supply
of wide range products
•
Lack of adequate air cargo facilities at Hanoi
international airport
•
Cost of transportation from Vietnam to
international market is higher than Thailand
•
Poor understanding and practice of post
harvest and storage factors
•
Poor facilities for handling, packing, and
cold storage for fresh produce
•
Inconsistent supply of raw materials for
processing factories
•
Fragmented production causes inconsistent
from 10-25%
quality
•
Decision 80 of Government on collecting
and packaging activities causes difficulties
for exporters
•
Lack of crop rotation knowledge
•
Unstable quantity for export at large volume
•
Research and development institutions is
poorly applied to actual fields
•
Too many intermediaries in the distribution
channel
•
Poor market information, marketing skills,
and trade promotion
•
Low recognition of Vietnam’s trademarks in
the international market
35
Opportunities
Threats
•
Increasing domestic demand
•
•
Operations of supermarkets and modern
distribution channels can have positive
impacts on Vietnamese growers
Unstable policy of Chinese border provincial
authorities
•
No agreements on animal and plant
quarantine with Japan, Korea, and the USA
Increasing demand for tropical fruit and high
value vegetables on a year round basis from
international market, especially organic
tropical fruit
•
Competitors like Chinese and Thai have
established world recognition of their brands
•
Too much concentration on close markets
prevent exporters expanding new markets
•
Fairtrade or organic agreements can create
more opportunities to Vietnamese exporters
•
Technical trade barriers to EU, Japan and the
USA
•
Government’s policy in encouraging clusters
especially in Southern provinces
•
The Vietnam – USA bilateral trade
agreement creates favorable conditions for
Vietnamese products
•
Government’s agressiveness in negotiating
animal and plant quarantine agreements with
Japan, Korea, and the USA
•
Governement’s agressiveness in assisting
companies expand market in EU and the
USA by opening new airlines including
aircargo
•
More and more international sea freights
companies like Mitsui OSK lines are entering
Vietnam
•
R&D institutions are trying to shorten the gap
between research and practice
•
New cultivation methods are being
introduced
•
Foreign investors in F&V are coming to
Vietnam and apply advanced practice to
serve international market
•
Domestic facilities available for pre-packing,
bar code, labeling
•
36
5. THE WAY FORWARD
Objectives
Measures
Targets by 2010
Initiatives and organizations concerned
Competitiveness
– • Number of growers’ • 5 new cooperatives • Group of growers formation program (Concerned
Capacity Diversification
Agencies: MARD and its institutions; Province
and/or material regions
owned
cooperatives
To form growers’ owned
People’s Committees; Vietnam Cooperative
and/or
group
of • 3 export house of
cooperatives and/or group
Alliance, Vietnam Fruit Association)
growers,
and/or
growers’
owned
of growers, and/or material
material region which
cooperatives
and/or • Export marketing training programs for
region
that
can
be
can provide the precooperatives and/or group of growers (Concerned
group of growers,
developed into specialized
cooling, packing and
and/or material region
Agencies: MARD, Vietrade, Associations)
export houses; and
cold storage facilities
To involve more growers’
and export the packed
owned cooperatives and/or
under a single brand
group of growers to export
and supporting activities
Competitiveness
– • Number of linkage • By
2010,
each • Removal of Decision 80 (Concerned Agencies:
Capacity Development
programs
between
exporters or processors
MARD, MOIT)
To tightly link
exporters/processors
to have three to five • Training programs to enhance the recognition of
exporters/processors,
with growers, and trade
linkage programs with
growers (Concerned Agencies: MARD, Vietnam
growers, and trade support
support organizations
growers in material
Cooperative Alliance, Associations, Donors)
37
organizations from
•
production to marketing
regions
Number of long-term
supply agreements/
•
•
Training top political and administrative leaders
Long-term agreements
of districts and wards on the issues of actual
contracts between
account for 80% of
implementation
growers and
F&V supply
Agencies: MARD, Vietnam Cooperative Alliance,
exporters/processors
transactions by 2010
Associations, Donors)
Reduction of blames •
By 2010, there is no •
Severe punishments to growers who break the
from
blame on breaking of
agreements with exporters/processors (Concerned
the contract in export
Agencies:
of F&V sector
People’s Committees, local courts)
another
one
side
•
to
•
of
the
contract
(Concerned
Exporters/Processors,
Commune
Third party involvement to ensure and encourage
implementation of contract between growers and
exporters/processors
Women
Associations,
(Concerned
Farmers
Agencies:
Associations,
Agricultural and Rural Development Bank)
•
Communication programs to deliver pros and
cons of follow the agreements (Concerned
Agencies: MARD, Vietnam Cooperative Alliance,
Associations,
Donors,
Commune
People’s
Committees)
38
Competitiveness –
• Practical researches to • 2-5 practically new • New modality of research bidding (Concerned
Capacity Development
Agencies: MARD, MOF, MOSTE, donors)
researches in the areas
be applied
To actively link research
of
high
yielding • Regular research forums between institutions and
• Number of institutions
institutions
and
varieties and cultivars,
exporters, processors, growers (Concerned
recognized by
universities with growers
seeds,
cooling
Agencies: MARD, Business Associations,
exporters, processors,
and exporters in the F&V
technology
and
Vietnam Cooperative Alliance, donors, Province
and growers
sector
methods dealing with
People’s Committees)
disease problems
•
5-7 research
institutions and
universities clearly
recognized by
exporters, processors
and growers
Competitiveness
– • The actual application • GAP is applied to • Training programs on GAP (Concerned Agencies:
Human
Capital
100% of exporting
MARD,
Vietnam
Cooperative
Alliance,
of GAP
Development
products
Associations)
• The
number
of
To raise the understanding
dedicated fresh export • 3 fresh export houses • Workshops on the management of export houses
and
skills
of
the
houses equipped with
equipped with pre(Concerned
Agencies:
MARD,
Vietnam
participants in F&V sector
cooling, hydro/vacuum
Cooperative Alliance, Associations, Donors)
pre-cooling,
about quality, food safety,
39
crop rotation, and post
hydro/vacuum cooling
harvest technology
and cold stores
•
The
•
number
of
dedicated cold storage
facilities
cooling and cold stores
offering
•
Exhibitions on pre-cooling, hydro/vacuum cooling
Crop rotation of fresh
and cold stores (Concerned Agencies: MARD,
vegetables accounts for
MOIT)
70% export value
•
Applied researches on crop rotation (Concerned
Agencies: MARD, Associations, Donors)
controlled atmosphere
(C/A) storage, ethylene
and CO2 scrubbing
•
The number of farms
and growers to apply
crop rotation
Competitiveness –
new
seeds • Programs to encourage applied research on seeds
• The number of new • 5-7
Capacity Diversification
introduced to F&V
(Concerned Agencies: institutions under MARD,
seeds to be applied
To apply new seeds which
growers
international companies, and donors)
• The number of new
bring high yielding cops to
F&V to be exported to • 3-5 new export
• Information on the demand of international
F&V sector and meet the
products to
market to exporters (Concerned Agencies:
international market
demand of international
international market
MARD, MOT)
market
• Participation to international F&V exhibition
(Concerned Agencies: MARD, MOIT)
40
Competitiveness –
• The number of new • 7-10 new off-season • Programs to encourage applied research on offCapacity Diversification
season (Concerned Agencies: institutions under
off-season
export
products to export to
To supply off-season
products to China, EU,
China, EU, Russia, and
MARD, international companies, and donors)
products to China, EU,
Russia
and
North
North America
• Information on the off-season demand of
Russia and North America
America
international market to exporters and growers
• Export value of off•
The
value
season exports
of
off-
season
products
(Concerned Agencies: MARD, MOIT)
account for 10% of •
Participation to international F&V exhibition
total F&V export
(Concerned Agencies: MARD, MOT)
Competitiveness –
• Reduction
of • Transportation
cost • 3PL (third party logistics providers) development
Cost of Doing Business
transportation cost in
reduces by 10-25% by
program (Concerned Agencies: Ministry of
To reduce transportation
the total cost of
2010
Transport; MPI; Hanoi, Haiphong, Danang and
cost
exporting products
HCMC People’s Committees)
Competitiveness –
• Percentage of growers • 100%
growers
of • Information campaigns on the financial support
Dissemination
of
funds (Concerned Agencies: MARD, Agricultural
know about financial
export F&V know
financial information
and Rural Development Bank, People’s Credit
support funds
about financial support
To
disseminate
more
Fund, Vietnam Cooperative Alliance, Commune’s
funds
• Number of growers
information on activities
People Committees, Donors)
who can access to • 50% growers of export
and conditions to use
F&V can access to
financial funds
financial support funds to
financial funds
growers
41
Competitiveness –
Infrastructure
Increase
choices
transportation
•
of
for
exporters in order to meet
•
requirements of on-time
delivery and good quality
from international markets
Increase
of
new •
new
airlines •
Vietnam
Bottle-neck
connecting
markets
with EU, Japan, and
Haiphong,
Committees)
Increase
air
cargo
the USA
facilities
at
Hanoi •
Adequate
air
cargo
facilities
at
Hanoi
Increase
international
freights companies
of
sea •
solving
program
(Concerned
Agencies: Ministry of Transport; MPI; Hanoi,
airlines to international
international airport
•
7-10
Danang
and
HCMC
People’s
international airport
5-10
international
more
freights
companies to run its
business in Vietnam
Development –
• Number of new areas • 7-10 new areas which • Researches on the availability of soil which is
To increase employment
which plant F&V for
plant F&V for export
good for growing export F&V (Concerned
and income of growers
export
by 2010
Agencies: Vietnam Research Institute of Fruit and
from the increase of F&V
Vegetable, Southern Fruit Research Institute,
export
National Fund for job creation, universities, and
other research institutions)
Development –
• Number of new remote • 7-10 new remote and • Clear investmetn incentives for exporters and
To develop the remote
mountainous
areas
processors which link with remote and/or
and mountainous areas
and/or mountainous areas
mountainous areas (Concerned Agencies: MARD,
which plant F&V for
which plant F&V for
42
through the increase of
export
export by 2010
Vietnam Cooperative Alliance, Vietnam Fruit
F&V export
Association, Donors)
•
Researches on the availability of soil which is
good for growing export F&V (Concerned
Agencies: Vietnam Research Institute of Fruit and
Vegetable, Southern Fruit Research Institute,
universities, and other research institutions)
Institutional Perspective • Clearly
responsible • One organization is • Proposal on working mechanism of the F&V
–
export
strategy
monitoring
organization
organization
fully responsible for
The Strategy Support
(Concerned
Agencies:
MOIT/VIETRADE,
monitoring the export
• Effective coordination
Network
MARD, Vietnam Cooperative Alliance, Vietnam
strategy of F&V with
among
support
To renovate the trade
Fruit Association)
adequate
human
organizations
support network which
resource, budget and • Coordinating mechanism proposal of trade
effectively
coordinates
action plans
support organizations (Concerned Agencies:
with one another in order
• 2 annually regular
MOIT/VIETRADE,
MARD,
Vietnam
to assist the export of F&V
meetings
and
Cooperative Alliance, Vietnam Fruit Association)
exchanges
support
between
organizations
and exporters
•
3-5
successful
task
43
forces
created
by
support
organizations
to solve F&V export
issues
Client Perspective –
• 5-7 Vietnamese F&V • F&V trade promotion campaign in international
• Recognized
Brands and Trademarks
brands are popular in
markets including trade information, trade fairs,
Vietnamese brands and
To increase the awareness
main
international
business forums, participation in Vietnam houses
trademarks
in
of
Vietnamese
F&V
markets
and e-commerce (Concerned Agencies: MARD,
international markets
exports
from
main
MOIT/VIETRADE,
International
Donors,
biggest
• Number
of • 7-10
international
export
Business Associations, Trade representative
importers/distributors
international buyers
markets
offices, Vegetexco, Vinafruit and private
in
main markets
distribute Vietnamese
organizations)
F&V brands
Client Perspective –
Client Priorities
To encourage FDI
•
to
Number of new FDI •
10-20 FDI projects to •
F&V’s FDI marketing campaigns (Concerned
projects in F&V sector
invest in Vietnam and
Agencies:
export to the world
Committees)
MARD,
MPI,
Province
People’s
invest and apply advanced
practice
to
serve
international market
44
6. WEIGHTING OF THE STAKEHOLDER perspectives
Two characteristics of F&V sector are highlighted by participants in the sector as
follows:
•
F&V products are consumed most in domestic market (85% of F&V products).
•
The export of F&V sector is relatively small compared to Vietnam’s export. It
is expected that the export of F&V sector in general and fresh F&V will not be
main export products of Vietnam.
From the development perspective, F&V can accelerate the development of remote and
mountainous areas. In Vietnam, the social function of agriculture is to ensure food
security while that of F&V sector is to provide nutrition to people. F&V sector can be a
good mean to create employment. MARD calculates that each hectare which grows
vegetables can create 10-15 jobs.
From the competitiveness perspective, long-term efforts should be made on solving
issues related to fragmented production, development of high yielding seeds, crop
rotation, post-harvest technology. Short-term initiatives must address issues of
participants’ behaviors including understanding and practicing quality, food safety, and
actual implementation of agreements. Both long-term and short-term initiatives must
include signing of plant quarantine agreements, inviting more third party logistics
providers, expanding air-cargo and sea-freight choices to advanced countries and/or reexport countries.
From the client perspective, F&V trade promotion campaigns including trade fairs,
business forums, and participation in Vietnam houses in main target markets should be
prioritized. The attraction of FDI to F&V sector can accelerate the export to home
markets of investors.
From the institutional perspective, coordination among trade support organizations is
the first priority. In order to do this, there should be one organization/team which is
clearly responsible for monitoring the export strategy. The working mechanism for this
organization/team must be examined more.
45
7. RESOURCE MOBILIZATION
In terms of mobilizing resources, the most important thing to do is to set up an
organization/team to monitor the strategy. While MARD focuses more on production
base, MOIT/VIETRADE concentrates more on overall export promotion of Vietnam.
Since F&V sector accounts for small part of Vietnam’s export, it is not the first priority
of national marketing campaigns. However, under support from ITC/UNCTAD, F&V
sector has already attracted attention of policy makers, especially from MOIT.
SHORT-TERM INITIATIVES
The following short-term initiatives should be implemented by the year 2010.
1. To set up an organization/team to monitor the strategy (F&V Coordinating
Team)
Responsible organizations
•
MOIT/VIETRADE,
MARD,
Vietnam
Fruit
Association, and donors
Funding sources
Implementation period
•
ODA
•
National Fund for Trade Promotion
•
First 6 months of 2010: Brainstorming sessions on
working mechanism of the new organization/team
•
June 2010 - : The team to monitor F&V export
strategy
2. To train participants in F&V sector including growers on GAP and train growers
in the sector to strictly follow agreements
Responsible organizations
•
MARD, MOIT, Vietnam Fruit Association, Vietnam
Cooperative Alliance, Associations, donors, and
exporters/processors
Coordinating agency
•
F&V Coordinating Team
46
Funding sources
•
National Scientific and Technological Development
Support Fund
•
Fund for Rural Industrial Extension
•
ODA
3. To sign animal and plant quarantine agreements with Japan and the USA, and
removal of Decision 80
Responsible organizations
•
MARD, MOIT
Funding sources
•
No funding required, mostly related to policy
Related activities
•
Information dissemination
LONG-TERM INITIATIVES
4. Growers’ owned cooperatives or group of growers formation program
Responsible organizations
•
MARD, Vietnam Cooperative Alliance, Province
People’s Committees, Vietnam Fruit Association, and
VIETRADE
Funding sources
•
National Scientific and Technological Development
Support Fund
Related activities
•
Fund for Rural Industrial Extension
•
National Fund for Trade Promotion
•
Select some cooperatives to intensively assist them
enhance capability of pre-cooling, packing, and
branding
•
Export marketing training programs for cooperatives
•
Communication programs
47
5. To increase number of practical research for F&V sector
Responsible organizations
•
MARD, MOSTE, MOF, donors
Coordinating agency
•
F&V Coordinating Team
Funding sources
•
National Scientific and Technological Development
Support Fund
Related activities
•
Fund for Rural Industrial Extension
•
National Fund for Trade Promotion
•
New modality of research bidding
•
Research forums between institutions and exporters,
processors, growers
Focused research
•
Seed development
•
Post-harvest technology
•
Crop rotation
•
Availability of soil which is good for growing export
F&V
6. To disseminate information on (i) demand of international markets; (ii) postharvest technology to F&V sector, especially fresh F&V; and (iii) financial support
funds
Responsible organizations
•
MARD, MOIT/VIETRADE
Coordinating agency
•
F&V Coordinating Team
Related organizations
•
Agricultural and Rural Development Bank, People’s
Credit Fund, Vietnam Cooperative Alliance, Donors,
Commune People’s Committees
Funding sources
•
National Scientific and Technological Development
Support Fund
Related activities
•
Fund for Rural Industrial Extension
•
National Fund for Trade Promotion
•
Workshop on the management of export houses
•
Exhibitions on pre-cooling, hydro/vacuum cooling
48
and cold stores
•
Information on demand and off-season demand from
international market
•
Information on international F&V trade fairs
•
Relevant website development and promotion
7. Vietnamese F&V branding program
Responsible organizations
•
MOIT/VIETRADE
Coordinating agency
•
F&V Coordinating Team
Related organizations
•
Private organizations, Vietnam Fruit Association, and
other associations
Funding sources
•
National Fund for Trade Promotion
Related activities
•
Participation to trade fairs
•
Jointly organizing and participating in business
forums
8. Bottle-neck solving program
Responsible organizations
•
Ministry of Transport, Ministry of Planning and
Investment
Coordinating agency
•
F&V Coordinating Team
Related organizations
•
Peoples’ Committees of Hanoi, Danang, Hochiminh
city, Haiphong
Funding sources
•
National Fund for FDI Marketing
Related activities
•
Inviting more third party logistics providers to
Vietnam
•
Opening more airlines to international markets,
especially main export markets and/or re-export
markets
•
Increasing air-cargo facilities at Noi Bai airport
49
APPENDICES
Appendix 1. Potential F&V for Exports
Approach
Products
Domestic Capacity
Approach
International market
preference Approach
Fruit: Mango (Hoa Loc and Chu); Citrus; Banana; Durian; Litchi,
Rambutan and Longan; Dragon Fruit, Milk fruit; pineapple;
avocado; solo Papaya; Persimmons; Physalis and Tomatillos;
Passion Fruit; Carambola; Tamarind
Vegetables: frozen spinach, cucumbers, sherkins, ginger,
mushroom, sweet potatoes, cabbages, taro
Fruit: Mango; Pineapple; Dragon Fruit; Persimmon; Avocado;
Feijoas; Physalis and Tomatillo; Carambola; Passion Fruit;
Tammarind; Mangosteen; banana; rambutan; pomelo; guava
Vegetables: Asparagus; Fine bean; Runer bean; Snow pea; Mange
Tout pea; Baby corn; Okra; Baby carrot, Chilli
Sources: Consulting Team and Agriculture & Livestock Industries Corporation VINAS (2006);
www.rauhoaquavietnam.vn (accessed 2009)
50
Appendix 2. Leading Developing Country Suppliers to the EU
% of total imports from developing countries
Total fruit
South Africa (14%), Costa Rica (12%), Ecuador (10%),
Colombia (8%), Chile (8%)
papayas
Brazil (72%), India (5%), Pakistan (5%), Ghana (5%), Thailand
(4%)
tamarinds, lych.
Madagascar (55%), South Africa (32%), Thailand (7%), India
(2%)
bananas
Ecuador (25%), Costa Rica (22%), Colombia (20%), Panama
(10%), Cameroon (8%), Côte d’Ivoire (6%)
guavas, mangoes
Brazil (50%), Peru (10%), Côte d’Ivoire (8%), South Africa
(8%), Pakistan (6%)
pineapples
Costa Rica (46%), Côte d’Ivoire (26%), Ghana (13%), Ecuador
(5%)
dates
Tunisia (67%), Algeria (16%), Iran (10%)
passion fruit
Malaysia (46%), Kenya (23%), Colombia (9%), Zimbabwe (8%)
avocados
South Africa (38%), Mexico (26%), Kenya (15%), Peru (12%),
Chile (5%)
figs
Turkey (74%), Brazil (23%), Peru (1%)
grapefruit
South Africa (44%), Turkey (21%), Argentina (13%), Honduras
(6%)
grapes
South Africa (41%), Chile (26%), Brazil (10%), Argentina (6%),
Turkey (6%)
lemons, limes
Argentina (65%), Brazil (12%), Turkey (9%), South Africa (8%),
Mexico (4%)
plums, sloes
South Africa (56%), Chile (28%), Argentina (9%), Turkey (4%)
cherries
Turkey (83%), Chile (8%), Argentina (4%)
pears
Argentina (46%), South Africa (29%), Chile (18%), China (4%),
Turkey (3%)
Total vegetables
Morocco (32%), Kenya (15%), Turkey (11%), Egypt (6%), Peru
(5%), Thailand (4%), Argentina (3%)
peas, beans
Kenya (34%), Morocco (32%), Egypt (11%), Guatemala (5%),
Senegal (4%)
sweet maize
Thailand (67%), Morocco (21%), Zimbabwe (4%), Zambia
(4%)
asparagus
Peru (82%), Thailand (8%), Mexico (3%), Morocco (2%), South
Africa (2%),
courgettes
Morocco (90%), Turkey (9%), South Africa (1%)
onions
Argentina (29%), China (24%), Egypt (13%), Chile (9%),
Turkey (8%)
artichokes
Egypt (99%), Tunisia (1%)
tomatoes
Morocco (75%), Turkey (18%), Senegal (2%)
capers
Morocco (98%), Dominican Republic (2%)
capsicum
Turkey (50%), Morocco (32%), Egypt (4%), Thailand (2%),
Dominican Rep. (2%)
eggplants
Turkey (74%), Thailand (7%), Kenya (7%), Surinam (4%)
truffles
China (85%), Croatia 12%), Morocco (2%)
mushrooms
Serbia & Montenegro (36%), China (16%), Turkey (15%), South
Africa (8%)
cucumbers
Turkey (55%), Morocco (27%), Jordan (7%)
Source: CBI quoted from Eurostat (2005)
Total share of
developing country
36%
74%
72%
69%
67%
64%
61%
54%
50%
46%
39%
37%
36%
32%
32%
32%
9%
54%
47%
22%
16%
13%
10%
7%
6%
5%
5%
3%
3%
2%
51
Appendix 3. Container Shipping Cost from Vietnam to International Markets
Container shipping cost from Hanoi and HCMC to international markets is much higher
than that from neighboring countries like Thailand, Malaysia, Singapore, the Philippines
and China.
Figure. 40-feet-container Shipping cost from Asian Cities to Yokohama, Japan
USD
1,800
1,600
Hanoi
1,400
HCM city
1,200
Singapore
1,000
Hongkong
800
Bangkok
600
Jakarta
400
Shanghai
200
Beijing
0
2001
2002
2003
2004
2005
Source: Nguyen Ngoc Son (2006) calculated by the author, basing on data of JETRO in 2001 – 2005
Reasons: Containers from Vietnam shipping to other countries have to ship to Hong
Kong, Singapore or Kaoshung (Taiwan), and then ship to destination countries (see the
“Hub and Spoke” figure).
Figure. HUB AND SPOKE
Pusan
Notes
Hub port
Shanghai
Feeder ports
Main corridors
Sub-corridors
Kaoshung
HCMC
Hong Kong
To the US,
Europe and
Japan
Vietnam
Hai Phong,
Da Nang
Singapore
Source: Modified based on Nguyen Ngoc Son (2006)
52
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Bui Thi Minh Hue (2005). Marketing solutions to promote Vegetexco’s export of
fruit to Japanese market. MBA thesis- National Economics University.
EU Market survey (2005). Fresh fruit and vegetables. Centre for the Promotion of
Imports from Developing Countries (CBI).
Higginson Alan (2006), Mission report on Fruit and Vegetables sector, submitted
to Project VIE/61/94, March.
MARD (2009). Export values of fruits & vegetables in 2008. Planning Department
– MARD.
MARD (2007). Qui hoach phat trien rau qua va hoa cay canh den nam 2010 (so
52/2007/Qð-BNN).
MARD (2006). Report on the development program of fruits, vegetables, and
flowers by 2010, and plan of 11 potential fruits for export (Draft).
Nguyen Thi Hong (2007). Strategy implications for exporting vegetables and
fruits to the United States market of Vegetexco. MBA thesis- National
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Thu tuong chinh phu (2008). Mot so chinh sach ho tro phat trien san xuat, che
bien, tieu thu rau, qua, che an toan den nam 2015 (so 107/2008/Qð-TTg)
Vinafruit (2009). Report on Vietnam Fruit Association’s activities in 2008.
Websites
http://www.rauhoaquavietnam.vn
http://www.chinhphu.vn
http://www.moit.gov.vn
http://www.agro.gov.vn
53