Dragon Fruit Prices in Vietnam Show Signs of Recovery

Dragon fruit prices have started to recover following two years of low prices. COVID-19 restrictions impacted the demand for Vietnamese exports causing prices to fall. Since the loosening of restrictions and opening up of the Vietnam/Chinese Border over the past week, customs clearance into China has been efficient, reducing the congestion that has prevailed over the past few months A recovery in trade has meant China's demand for Vietnamese dragon fruit has gone up significantly.

Throughout Q1, dragon fruit prices in Vietnam averaged USD 0.43/kg, occasionally falling to USD 0.13/kg, the lowest level in over two years. Consequently, sales barely covered production costs, prompting many Vietnamese growers to cut down their dragon fruit orchards to minimize losses. During this period, growers in Binh Thuan province felled 936 ha of dragon fruit orchards. Along with the 1,364 ha in 2021, the planted area of dragon fruit has reduced by 6%. Growers in this province were the most affected by Chinese COVID-19 restrictions, as 85% of the fruit from Binh Thuan is destined for the Asian superpower.

In the last week of April, dragon fruit prices have recovered due to operations at the China-Vietnam border returning to normal. In Long An province, Garde-A red flesh dragon fruit reached USD 1.09/kg, with the Grade-B variety priced at USD 0.87/kg. At these price levels, dragon fruit growers are able to cover the cost of production, which equates to USD 0.43/kg, while making good profits. Demand from China has been overwhelming, and Long An and Tien Giang farmers are running out of dragon fruit.

Market participants expect this price trend to be temporary as the Vietnamese dragon fruit moves through the China-Vietnam border, which remains unstable owing to constantly changing COVID-19 regulations. Border operations have been unpredictable in recent years, and if operations cease, dragon fruit prices will decrease again, leaving growers in difficulty. This scenario has significantly impacted the sustainability of the dragon fruit trade in the country. Due to this, the Vietnamese government is actively working on penetrating alternative markets such as the EU and the US in order to reduce the country’s dependence on the Chinese market.