Market overview
Vegetables and fruits are recognized as one of the main export agricultural products of Vietnam, in which fruit accounts for nearly 80%. Vietnam Fruits and Vegetables market is expected to reach a CAGR of 4.5% during the forecast period (2022-2027). The COVID-19 pandemic caused disruptions in global logistics activities and reduced demand in major export markets, leading to a reduction in Vietnamese fruit exports in 2020. Land transportation has been delayed between China and Vietnam, leading to low exports.
In the short term, the growing demand for Vietnamese fruits and vegetables among countries, such as China and Korea, and the increase in the number of free trade agreements aimed at boosting fruit and vegetable exports in the near future.
Main market trends
The demand for agricultural products is high, including vegetables and fruits from Vietnam to countries like South Korea, Japan. Fruit and vegetable exports to South Korea include coconuts, bananas, mangoes and dragon fruit, increased 10.1% and Japan increased 20.1% in 2021. Currently, Vietnam exports to 60 countries, including countries of the European Union, the United States, China and other Asian countries. With the increase in the number of free trade agreements with trading countries, the exports of fruits and vegetables in the region are expected to increase during the forecast period.
Demand for Vietnamese fruits and vegetables
In the context of fruit and vegetable exports to China facing difficulties, many enterprises have spent hundreds of millions of dollars in investment and processing systems and plants to sell their products to Europe and the US. Although the traditional markets faced many difficulties during the recovery period, other markets still had great demand for agricultural products. The amount of processed product exported has doubled since 2021.
Vietnam has the advantage of exporting vegetables and fruits in the EU market because Vietnam is the only country in the Asia Pacific region has a free trade agreement with the EU. As a result, the tax rate on some Vietnamese vegetables and fruits exported to the EU market has been reduced to 0%, creating a significant competitive advantage compared to other countries in the region.
Vietnam’s fruits and vegetables export market is shifting. For many years in a row, China has been the largest fruit and vegetable export market of Vietnam, accounting for about 65-80% of the industry’s total revenue. However, the situation has fell year-on-year due to some effects. Meanwhile, the export market of vegetables and fruits to the US, South Korea, Japan and Australia has been increased. This shift creates positive impacts for the fruit and vegetable industry.
Summary
The Vietnamese fruits and vegetables export market has challenges but at the same time has new opportunities in major markets such as the US, Europe and East Asia. In the future, with free trade agreements, Vietnam will take advantage of this opportunity to increase export activities. Also, Vietnamese agricultural product manufacturers need to improve their competitiveness with quality farming and harvesting processes to exploit these agreements.
(Source: mordorintelligence.com)