Chinese fruit flies into Vietnam

Chinese fruits are pouring into Vietnam in ever-greater quantities and competing head-on with Vietnamese produce in the domestic market, whereas only a few years ago China was one of Vietnam’s main markets, accounting for some 50-60% of the national fruit export turnover. Meanwhile down at Thu Duc Agro-market, often regarded as the biggest fruit wholesale center for HCMC and the southern region, the volume of imported Chinese fruits continues to increase.

The Thu Duc Agriculture Wholesale Market’s director, Tran Quang Nhuong, said that about 1,200 tons of fruit is now traded at the market on an average working day, of which 35% is now imported, mainly from China. However, Vietnam’s Mekong Delta provinces are still seen as the fruit granary of the country, although sometimes Chinese fruit trades account for up to 50% of the total now. He added that only two years ago there was hardly any Chinese fruit traded at the market, which illustrates the benefits of large-scale commercial production.

The Vietnamese Fruit Association (Vinafruit) said that the reason for the sudden influx of Chinese fruit was the Early Harvest Program (EHP) bi-national agreement that was signed between both countries that came into effect earlier this year. Consequently, China’s agro imports now only attract an average tax tariff of 7.94%, almost half that of last year.

Though the agreement is mutual, allowing Vietnamese fruit exporters to better penetrate the Chinese market with an equivalent reduction in tariffs, exports have infact fallen dramatically in recent years, by US$20 million in 2004, a decline of 14% from 2001. Conversely, Chinese fruits are rolling across the border and achieved US$80 million in exports last year – a huge increase on 2001’s US$31 million, and now expected to reach more than US$100 million be the end of this year!

Nguyen Van Ky, general secretary of Vinafruit, said that the trade agreement was unreasonable because Vietnam has some 500,000 hectares given over to fruit production yielding millions of tons that can easily supply sufficient quantities for the domestic market, and because Vietnam shares a common border with China that makes mass transportation easy.

“Many Vietnamese fruit exporters hoped that the EHP program would help them increase exports and so increase production, however, until now they have been unable to take advantage of the program,” he said.

Many enterprises have said that Vietnamese fruit cannot compete against Chinese imports because of their more sophisticated post-harvesting processing and preservation techniques, and better promotional and sales skills. Ky added that Vietnam faced many problems from initial crop planting and maintenance competence to the end harvesting, processing and exporting.

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