Vietnam and Thailand are the two leaders in producing and exporting exotic fruits to the rest of the world. Both of these countries have diverse climatic zones, terrains, and growing conditions, allowing the production of a variety of tropical fruits. They are known for fruits like mangos, dragon fruit, bananas, longans, lychees, watermelons, rambutans, jackfruit, mangosteens, passion fruit, and durians. Out of the two, Vietnam has a larger fruit output of 12–13 million mt a year, whereas the fruit output of Thailand hovers between 5–6 million mt. Based on export figures, Vietnam is continuously losing some of its market share to Thailand, and producers and farmers across Vietnam’s fruit sector are trying to understand why. Despite the fact that Vietnam’s fruit output is nearly 2.4 times higher, the country is not able to match the turnover generated by fruit exports by Thailand.
The trend has been going on for the last 2-3 years, with Vietnam exporting fruit and vegetables worth USD 3.7 billion in 2019, USD 3.26 billion in 2021, and now projected to export USD 3.2 billion in 2022. At the same time, the value generated from Thailand’s fruit and vegetable exports increased from USD 3.76 billion in 2019 to over USD 5.3 billion in 2021 and is projected to increase to USD 8.5 billion in 2022. Vietnam’s Ministry of Agriculture and Rural Development is working towards understanding the reasons behind the gap in export turnover between the two countries and is developing new policies to regain fruit export power in the region. Vietnam is attempting to gain a foothold in the Chinese market by improving the quality and certification of its exports. Furthermore, the country recorded a significant increase in exports to the United States, the European Union, and Japan in the last few years.
Vietnam and Thailand’s Fruit Export Turnover
Source: Ministry of Agriculture and Rural Development, Vietnam.
According to the Minister of Agriculture and Rural Development, Mr. Le Minh Hoan, one of the major reasons for low export revenue is the lack of knowledge about market trends in the destination country among Vietnamese fruit producers. Vietnam focuses on exporting fresh fruits, which often have a shorter shelf life, lower market price, and weaker demand in markets like China, the United States, the European Union, and Japan. The country's fruit processing capacity is limited, and it exports mainly fresh fruit (accounting for 75.9% of exports). Thailand, on the other hand, has invested in processing these fresh tropical fruits and exporting them at a premium price, fetching higher revenues. Apart from exporting fresh fruits, the country exports canned and diced fruits, frozen fruits as well as dehydrated dried fruits across the countries. In order to remain competitive with Thailand, Vietnam needs to establish a value chain where fruits are presented according to customer preferences in destination countries, thereby increasing the value of these exports..