Vietnam farm organizations are seeking higher more competitive prices for dragon fruit saying that shifting production away from the Chinese into higher value fresh markets is in order
At a recent business forum in Ho Chi Minh City, Do Minh Kinh, deputy director of the Binh Thuan Department of Trade and Industry noted official government statistics show approximately 80% of all dragon fruit is shipped to the Chinese market.
Roughly 18% of the annual crop is sold locally with only 2-3% exported to higher-quality fresh markets around the globe, said Mr Kinh, adding that changing the sales structure is going to be tougher than one may think.
To be honest, consumers in China look for the cheapest fruit price and cost is the only factor they consider.
Thus, the entire industry from growers to distributors to retail buyers is geared towards low-quality low- cost, with little or no consideration for food safety.
Ngo Van Tuan, director of the Tien Giang Province Department of Trade and Industry, agreed with Mr Kinh’s assessment.
He pointed out there are very many instances of where farmers who have paid proper attention to VietGap and GlobalGap standards are successfully exporting to high-demand fresh markets such as those in the EU and Japan.
However, complying with food safety standards adds cost at many levels of production and there hasn’t been proper attention paid to cultivating sufficient high-demand overseas fresh markets.
Many dragon fruit grower’s losses have swelled as they are forced to sell high-quality fruit to local buyers for sale in China and they don’t receive any higher price than that paid for low-quality fruit.
In the end, these farmers don’t recoup the additional cost of implementing VietGap and end up worse off for attempting to do so.
Deputy Minister Ho Thi Kim Thoa of the Ministry of Agriculture and Rural Development (MARD) suggested the solution is multifaceted. On the one hand, more time and effort must go into developing new, viable fresh markets for dragon fruit.
On the other hand, global demand is increasing for a wide array of higher profit fresh, locally grown fruit and vegetables such as apples, peaches, plums, oranges, tomatoes, lettuce and corn among others.
There’s only so much of a market for dragon fruit outside of China. Since that market is unprofitable, it makes logical good sense to transition into other higher demand fresh-market crops.
The challenge is to find additional markets for a wide variety of fruits and vegetables and gear production towards meeting the demand.
Ms Thoa echoed findings in recent reports that have urged the Vietnam fruit industry to develop a brand strategy, raise focus on consumer demands and take other steps to improve efficiency and competitiveness.
Paramount to the success of the strategy, said Ms Thoa, will be developing a relentless focus by farmers and other actors in the industry on satisfying (or exceeding) the needs and expectations of the end consumer.
In addition to emphasizing higher-value farm products, Vietnam fruit growers should improve data-sharing throughout the supply chain and hire professionals to oversee sales and marketing.
Part of the challenge for growers in transitioning to other produce, Ms Thoa said, is that it takes two to eight years after planting for trees of some produce to bear fruit.
So, making the decision is a big one and must be made with great professional care to ensure Vietnam growers are well-positioned after the changeover with enhanced market opportunities and unique varieties.
The bottom line is that the fruit industry must look at what global consumers and global retailers want in profitable markets with high-demands for safe foods— and meet or surpass those standards, the Deputy Minister underscored.