The first half of 2020 has been a difficult period for the Vietnamese fruit industry. The historical drought with saltwater intrusion, and the COVID-19 outbreak have had significant impact on Vietnamese farmers and fruit exporters.
Anna is a sales manager at the Vietnamese fruit export company True Fruits Co., Ltd. She recently shared her insights into current conditions in the local fruit industry.
“At the moment, Vietnam is experiencing an extreme drought, and especially the saltwater intrusion in the Mekong Delta reached a historical high. Ben Tre province, the so-called “coconut land”, suffered badly from the drought disaster. Although coconut trees are reputably saltwater resistant, the severe saltwater intrusion has resulted in coconut trees losing flowers, it means the decline in productivity causes a shortage in quantity.
“As a result, the coconut production in Vietnam decreased by around 20% compared with the same period last year. Besides, the size of the fruit is also smaller than the previous year. The normal coconuts for export weigh between 700g – 1200g/fruit, but this year, we can only commit to export products weighing around 550g/fruit.
“On the one hand, the decline in production quantity has pushed up the export price, especially during the summer when the production is boosted. On the other hand, the COVID-19 outbreak has a big influence on our target market. Consumer power in European and North American retail chains has not yet recovered. At the moment, the majority of our sales go to processing factories in China and Thailand.”
When talking about the situation in the next few weeks, Anna said, “With the rain season coming soon, we expect the saltwater intrusion situation to improve soon. However, we estimate that it will take at least 3 months for the coconut trees to reach stable productivity conditions.”
The COVID-19 pandemic also complicates logistics for Vietnamese exporters. “The current air freight cost is $ 7-8 per kg, almost double higher (normal $2.9-$3.0/kg) than in the normal period. We are promoting the development of convenient and environmentally friendly logistics, while ensuring the best quality of fruits after long-distance transport.”
We hope that in the context of the European Union Vietnam Free Trade Agreement (EVFTA), which is providing almost 99 percent of the elimination of custom duties between the EU and Vietnam takes effect around July or August this year will create opportunities for export businesses like us to recover from the effects of the pandemic.
Besides coconuts, True Fruits also exports a large volume of a variety of tropical fruits such as pomelo, limes and jackfruit.