Growing Demand: Vietnam's Processed Fruits and Vegetables Gain Traction in Global Markets

08/03/2024 17:13

China, South Korea and the US are boosting their purchases of processed fruits and vegetables from Vietnam, bringing vigor to the early months of the year and alleviating the perennial issue of "seasonal glut, price drop" that has persisted for many years.

Mr. Nguyen Van Thu, Chairman of the Board of Directors of GC Food, stated that domestic consumer demand for processed fruits and vegetables slowed at the beginning of the year, but it continued to increase globally. High-quality products, beneficial for health, are increasingly preferred by consumers in various countries.

Ms. Nguyen Thi Thanh Ha, CEO of the western Westfood Food Processing and Export Joint Stock Company, also reported that sales volume in the first two months of the year increased by nearly 50% compared to the same period in 2023. Markets in Europe, the United States, Australia, and New Zealand all saw significant growth. This indicates the increasing potential and preference for processed fruits and vegetables.

GC Foods aloe vera processing plant in Ninh Thuan. Photo: Linh Dan

According to Ms. Ha, global dietary trends are shifting towards processed foods. In the US market, canned products from her company are experiencing the fastest growth, nearly seven times that of the same period in 2023. Similarly, the European market, despite its technical barriers, has also grown by over 30% compared to the same period last year.

Similarly, Vinamit - a dried fruit exporter to China, also has regular orders. Vinamit CEO Nguyen Lam Vien said that dried bananas, jackfruit, and frozen durian,... would be explosive products this year.

Businesses believe that Vietnam currently enjoys several advantages with abundant supply and competitive production costs. Meanwhile, El Nino phenomena globally are delaying harvest seasons for competitors like Thailand, Peru, and Ecuador, significantly affecting their supply volumes. Particularly in the Chinese market, Vietnam has many advantages in terms of quick delivery times and low shipping costs...

According to the Vietnam Fruit and Vegetable Association, from 2022 to present, the export of processed fruits and vegetables has consistently exceeded 1 billion USD. In 2023 alone, the export of this commodity reached nearly 1.3 billion USD, marking a 20% increase compared to the same period the previous year.

Mr. Dang Phuc Nguyen, the Secretary-General of the Vietnam Fruit and Vegetable Association, evaluates that processed fruits and vegetables have officially joined the billion-dollar "club" of the agricultural sector. It is projected that the export of this sector may reach nearly 1.6 billion USD this year.

"China has allowed Vietnam to export frozen durian to this market, so the processed fruit and vegetable sector's export turnover could reach USD 2 billion," he predicted.

Similarly, Mr. Vien believes that when China consumes more processed fruits and vegetables from Vietnam, agricultural prices will stabilize, and farmers will not worry about "seasonal glut, price drop." Processed ingredients also have a longer shelf life, minimize waste and disposal.

In addition to the Chinese market, according to Mr. Nguyen Van Thu, potential new markets such as Central Asia, Eastern Europe, and India also prefer Vietnamese processed fruits and vegetables for their high quality and competitive prices.

According to the Ministry of Agriculture and Rural Development of Vietnam, processed fruits and vegetables account for 24% of the total export revenue of fruits and vegetables. Currently, the global market for processed fruits and vegetables is large, with an estimated value of about USD 392 billion by 2025. With favorable conditions as a country with abundant supply, Vietnam will have a foothold in the international market as many businesses participate in sustainable value chains.

However, experts believe that Vietnam also faces the risk of reduced raw material supply. Tensions in the Red Sea region have led to high freight rates. Shipping costs for routes from Vietnam to the EU, for example, have increased 3-5 times compared to the same period last year. Shipping companies have to change schedules, resulting in delays and shortages, pushing costs higher.

To drive growth, businesses say they are expanding their scale and creating sustainable raw material areas. At GC Food, the company has invested in upgrading production lines with a capacity increased to 25,000 tons for the Aloe vera plant and 20,000 tons for the Coconut jelly plant. With Aloe vera leaf raw material areas, the company continues to invest in close linkage with farmers. This supply source will meet 30% of the company's total demand this year.

To drive growth, businesses say they are expanding their scale and creating sustainable raw material areas. At GC Food, the company has invested in upgrading production lines with a capacity increased to 25,000 tons for the Aloe vera plant and 20,000 tons for the Coconut jelly plant. With Aloe vera leaf raw material areas, the company continues to invest in close linkage with farmers. This supply source will meet 30% of the company's total demand this year.

Vinamit, besides creating its own raw material areas, also collaborates with thousands of farmers to create value chains.

Meanwhile, Westfood says it is proactively deploying the development of nurseries and raw material areas aiming to reach 1,000 hectares in the Mekong Delta region, mainly focusing on pineapple, mango, and papaya.

Source: vnexpress.net