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INCREASING MARKET ACCESS OF SELECTED TROPICAL FRUIT THROUGH VALUE CHAIN IMPROVEMENTS IN VIETNAM
 
 
Luong Ngoc Trung Lap1 and Nguyen Minh Chau2
1Luong Ngoc Trung Lap, Ph.D, Head of Fruit Marketing, 
2Nguyen Minh Chau, Associate Professor, Ph.D, Former General Director, 
Southern Horticultural Research Institute (SOFRI). 
P.O. Box 203 My Tho City, Tien Giang Province, Vietnam
 
 
 
ABSTRACT
 
This paper discusses the production, demand trend, export and market access of four selected major tropical fruit namely dragon fruit, mango, rambutan and pomelo through value chain improvements in Vietnam. The results showed that tropical fruit in Vietnam are normally produced by small-scale farmers.  Mostly, fruit growers sold their fruit to village collectors according to grade. The seasonality/availablity of fruit, new variety and good agricultural practices (GAP) were the main factors that detemined the highest price through value chain improvement. The main support policies to improve market access of fruit in Vietnam are marketing information system, technical training courses on fruit production in off-season and disease (for dragon fruit, pomelo and rambutan), implementing GAP standards for farmers. Moreover, government should support credit to build the collection centers and packing houses, improve the logistics and promote export. 
 
Keywords: Market access, tropical fruit, value chain, exports.
 
 
INTRODUCTION
 
The fruit sector has historically played important roles in Vietnam’s agriculture, from restructuring of the agriculture industry, to resolving employment for people living in rural areas, and creating a significant source of income for growers. Vietnam is largely an agrarian society, with two-thirds of the labor force working in agriculture. Currently, fruit and vegetable development in Vietnam was given low priority because the government emphasized policies related to rice self-sufficiency. However, the diverse agro-climatic (soil, water, weather) conditions of the country are very congenial for cultivation of various fruit crops. 
 
According to the Department of Crop Production of the Ministry of Agriculture and Rural Development (MARD), in 2013, the total area of all fruit crops was 832,720 ha, with production of 7.6 million tons. The fruit and vegetable export in Vietnam had constantly increased during the period of 2001-2013. In terms of value, Vietnam fruit and vegetable export was recorded highest at US$1,040 million in 2013 compared with US$460 million in 2010. Fruit export in Vietnam has strong competitiveness potential with regard to specific varieties, different harvesting season, low selling price and good quality. At present, Vietnam is a major exporter of dragon fruit in the world, and  the largest rambutan supplier in China and the U.S. markets.  However, there are many factors that need to be improved to make Vietnam an important tropical fruit exporting country.
 
This paper aims to:
  1. provide a brief review of the situation of production, export market and market access of four selected fruit market i.e dragon fruit, rambutan, mango and pomelo;
  2. understand the challenges facing tropical fruit value chain and market access; and
  3. identify the determinants which can improve market access for four markets of selected fruit i.e dragon fruit, rambutan, mango and pomelo.
 
METHODOLOGY
 
The study was carried out by accessing relevant information from the MARD, the Government Statistics Office (GSO), and provincial Departments of Agriculture and Rural Development (DARD) in Vietnam. Secondary data were also obtained from annual reports of different organizations; and reports from projects, conferences, workshops, internet, etc. The selection of fruit crops for this study was based on percentage share of selected fruit area, production and value export in the country. Therefore, all the major fruit crops in Vietnam, specifically dragon fruit, mango, rambutan and pomelo were selected for this study. 
 
FRUIT PRODUCTION IN VIETNAM
 
The diverse agro-climatic (soil, water, weather) conditions of the country are very congenial for cultivation of various fruit crops. The kind of fruit in the country is diversified and plentiful, especially those concentrated in the southern provinces. There are more than 40 species of fruit in the country, and many fruit varieties and regional specialties are delicious such as Hoa Loc mango, Da xanh pomelo, Nam Roi pomelo, dragon fruit (white flesh, red flesh and purple pink flesh), Ri-6 durian, Xuong com vang longan, Long longan, Nhan rambutan, Thieu lychee, seedless tangerine, seedless king orange and some kinds of fruit are grown only in Vietnam.  These are Lo Ren star apple, acelora and Hong tangerine.
 
According to the Department of Crop Production of MARD, the total area of all fruit crops reached 832,720ha with 7.6 million tons in 2013 for 767,000ha with tons in 2005. Due to the difference of ecological zones as well as the difference in farming practices, the production of fruit crops in Vietnam has specific characters in different regions. 
 
Ecological zones 
 
There are eight fruit production zones in the country (Fig. 1) such as:
 
South Central coast The climate is seasonally characterized by dry, hot weather with intermittent and strong winds. The region also has the lowest rainfall throughout country. In general, the production of fruit crops in the Central Coast region is facing many difficulties due to poor and infertile condition of soil, frequent natural disasters such as floods, typhoons, draughts, unequal rainfall distribution, less variety of fruit trees, low productivity, less quantity, with fruit mostly consumed only in local markets. 
 
The fertility of soil in some provinces (bazan) and good weather are conducive for growing fruit trees but some places don't have enough water sources. The other problem in the development of mango production is the competition with other crops (rice, maize, cassava, cashews nut etc.). However, the southern provinces of the region (Khanh Hoa, Binh Dinh) have location advantage to develop mango production due to dry humidity in the monsoon. In 2013, the area of fruit crops in the South Central Coast was 35,500 ha, sharing nearly 4.3% of these total fruit crops in the whole nation. The major fruit grown in the region are: mango, banana, pineapple and citrus.
 
Central Highlands The soil (bazan) and weather etc. in highland provinces are good conditions for growing fruit trees but some places don't have  enough irrigation.  Development of fruit trees in this region is less competitive compared with perennial crops (coffee, rubber, cassava, cashew nut and pepper). The Central Highlands produce mainly avocado, banana, durian, persimmon and strawberry.
 
Southeast This region has more advantages for developing fruit trees. For one, they have good soil condition and weather. The Southeast region is the second biggest producer of fruit in the country in terms of land area.  It is a major producer of dragon fruit, durian, ranbutan mango, grapes, mangosteen, jackfruit and sweetsop. Some provinces i.e. Ho Chi Minh city, Dong Nai, Binh Duong, Ba Ria Vung Tau are referred to as the economics zone and the main consumption market for fruit commodities. It is also a main supplier of agricultural equipment for development of fruit farms on a large scale.
 
Mekong Delta The region remains the main producer of fruit crops in the country, and has good natural condition. A large number of fruit growers in the region have good practical number of fruit trees. The total area of fruit crops in 2013 was 288,300 ha, accounting for almost 34.6% of the total area of fruit in the country. The Mekong Delta are main producers of citrus, mango, longan, rambutan, dragon fruit, mangosteen, banana, pineapple, sapodilla and star apple. The government has planned a program for developing fruit crops in Mekong Delta region as well as the provincial development programs on specialty fruit.  However, the scale of farms is small, scattered and planted as a mixed crop. 
 
Northern Provinces consist of four remaning regions (Northeast, Northwest, Red Delta and Central North). The distribution of fruit in the area of Northern Provinces was 36.4% of total fruit area in the country. The area has sub-tropical climate with cool winter, therefore many different kinds of fruit trees are grown. This includes tropical, subtropical and temperate fruit crops like plum, peach, persimmon, apricot, lychee, longan and citrus. There are many well-known fruit in the Northern Provinces such as Long Hung Yen longan, Luc Ngan lychee, Doan Hung pomelo, Bo Ha orange and Sa Pa peach.
 
Each fruit production zone mentioned above  has different advantages. Bring into play of strength of each zone, the produce of fruit crops in Vietnam had recorded highest growth both in quantity and quality during the last 10 years. At present, Vietnam’s fruit has adapted the requirements of the domestic markets and has accessed the international markets as well. 
 
In general, the total area of fruit crops increased yearly, with a total increase of 65,000ha (Table 1) from 2005 to 2013 (Fig. 2). In recent years, the Southeast region had shown fastest growth in area, with 15%/year. This is still a lot of unused farmland. The trend of fruit area in Mekong Delta during the period of 2010-2013 had shown a low increase (just less than 1% per year), but thanks to the application of new technologies, development of fruit varieties, concentrated area and good agri. cultural new practices, the yield and production of fruit crops in the Mekong Delta region had drastically increased (3-4%/year) during 2010 to 2013.
 
Area and production of fruit in Vietnam
 
The total cultivated area of fruit trees in Vietnam increased regularly per year. However, in recent years, the growth rate in the area declined compared to the period 2000-2005. The area of fruit in Vietnam drastically increased during 2000 to 2005. It was recorded only at 565,000 ha in 2000 and increased to 767,000 ha in 2005, which was about 35.8% more than in 2000. The annual average growth rate during 2000-2005 was 7.2%/year. 
 
In 2013, the fruit production area was estimated at over 832,000 ha, about 8.5% more than in 2005 and the average growth rate during this period was only 1%/year.
 
The annual average growth rate in area of fruit decreased due to many reasons such as unused cultivated areas, changing of annual crops with weak economic efficiency and profit competition with other cash crops like rice, cassava, maize and other crops such as coffee, rubber, pepper. In Mekong Delta, the enclosed embankment is also a significant obstacle which reduces the area of fruit trees. Besides, some citrus orchards have been heavily infected by the greening disease or root rot for many years. The farmers are not able to control the disease and do not have enough capital technology investments for their orchards.
 
Category structure of fruit in Vietnam is  diverse, especially those concentrated in the southern provinces. Many special fruit such as Hoa Loc mango, Da xanh pomelo, Ri-6 durian, Xuong com vang longan, star apple, sweet tangerine are very popular in the domestic market which bring high economic efficiency for growers.
 
Distribution of fruit area in 2013 (Fig. 3) showed that growing rate of banana is the highest at 14.9% of total area of fruit trees followed by mango (10.4%), longan (9.8%), lychee (9.2%), oranges (6.4%), pomelo (5.5%) and pineapple (4.9%). The minor fruit accounted for 38.9% of the total area of fruit, of which, dragon fruit accounted for 3.4%, followed by durian (3.0%), rambutan (2.9%), lemon (2.6%), sweetsop (2.3%), plum (1.5%), persimmon (1.1%), apples (0.6%) and other fruit (21.5%).
 
According to the Department of Crop Production MARD, a structure of fruit trees has been changed for the last decade with the increasing proportion of dragon fruit and pomelo due to high economic efficiency. Dragon fruit accounted for 0.2% in 2005 of the total area for fruit, an increase to 3.4% in 2013 and pomelo from 2.0% in 2005 to 6.0% in 2013. In contrast, proportion of longan and orange decreased from 22% and 10% in 2005 to 9.8% and 6.4% in 2013, respectively, due to weak economic efficiency and serious infection of pests.
 
The tropical fruit in Vietnam are banana, mango, dragon fruit, pineapple, longan, citrus, durian, lychee and rambutan which represent an estimated 95% of total fruit production. The other 5% are subtropical fruit which include apple, plum,  and peach. Fruit production throughout the country was estimated at over 7.6 million tons in 2013, slightly more than 7.0 million tons which was produced in 2010. This is the highest output of fruit, the contribution of which ensures consumer demand for fruit in the local market and engages the supply for the export markets. The main tropical fruit produced was banana with over 1,800 thousand tons or produced 24% of the total national fruit production.  This was followed by mango 776,000 tons, dragon fruit 585,000 tons, pineapple 572,000 tons, longan 545,000 tons, oranges 521,000 tons, pomelo 433,000 tons, lychee 337,000 tons, durian 217,000 tons and 1,770,000 tons for other fruit (Fig. 4).
 
Production of four selected fruit
 
Dragon fruit
 
Dragon fruit is considered one of the special agricultural products which is preferred both by the domestic and international consumers. The land area of dragon fruit has rapidly increased in the last decade. It was only 560 ha in 2000, increasing up to nearly 1 thousand ha in 2005 and 17,800 ha in 2010. At present, area and production of Vietnam’s dragon fruit are expected to reach at 28.5 thousand ha and 585 thousand tons, respectively (Fig. 5). 
 
The weather condition in Southern Vietnam is favorable for dragon fruit production. There are more than 30 provinces producing dragon fruit in the country. Binh Thuan, Tien Giang and Long An are the main producers of dragon fruit in the country. In 2013, Binh Thuan province has the largest area with 20,000 ha (76.6% of total area of dragon fruit in whole country), Tien Giang province at 3,000 ha (11.5%) and Long An province at 2,100 ha (8.0%).
 
Mango
 
Mango is the major fruit of Vietnam which is widely grown throughout the country. However, the mango area is concentrated in the Southern provinces, accounting for 92% of  the total area. According to the General Statistics Office of Vietnam, the country's mango area reached 85,600 ha in 2013 (Fig. 6), almost double compared to the 2000 figure.  In recent years, the area planted to mangoes has slightly decreased. Currently, there are 63 provinces and cities nationwide which are planted to mangoes, of which 59 provinces, cover 100 ha. of mango plantation.
 
Mekong Delta region has the largest area of mango plantation in the country with approximately 41,200 ha (47.6% of total mango area of the country), the Southeast part has 21,700 ha (25.1%) while the Coast South Central area has 8,900 ha (10.2%). The province with a leading area in mango production include Dong Nai (9,600 ha), Dong Thap (9,100 ha), Khanh Hoa (6,500 ha), Tien Giang (5,600 ha), Vinh Long (4,700 ha), An Giang (4,600 ha), Hau Giang (3,900 ha) and Ho Chi Minh City (3,800 ha). 
 
Mango ranks second in the national fruit production (after bananas). According to the General Statistics Office of Vietnam, mango production in 2013 reached at 774,000 tons and increased more than four times during the period 2000 to 2013. The production of mango in the state had recorded highest growth during 2000 to 2005, with a magnitude of nearly 204,000 tons. 
 
In 2013, the Mekong Delta region is the leader in mango production in the country with a production of 509,000 tons (accounting for 65% of the total mango production in the country), followed by Southeast at 151,000 tons (20%) and South Central Coast at 52,000 tons (6.1%). The provinces which topped mango production include Tien Giang (107,000 tons), Dong Thap (75,200 tons), Dong Nai (76,000 tons), An Giang (58,500 tons) and Vinh Long (52,200 tons).
 
Rambutan
 
Rambutan is mainly grown in the Southern part of Vietnam. In 2005-2013, the area planted to rambutan had shown a slight constant increase.  The area and production of rambutan in Vietnam were 23,500 ha with a yield of 207,600 tons in 2005. This increased to 24,600 ha and a yield of 312,000 tons in 2013, respectively (Fig. 7). The reasons for the increase in rambutan production are many growers have good knowledge of farm practices, and the farmers conduct a process of intensive cultivation of fruit trees.  They also apply scientific and technical achievements to production, replace the old orchards by improved grafting, balance fertilizer, combined micro organic and mineral fertilizer to improve yield and quality of fruit flowering processed as desired and integrate management of pest and disease for fruit trees.
 
Pomelo
 
Pomelo is grown widely in the country. The major area for production of pomelo is concentrated in the Mekong Delta region, contributing to 58.4% of total national pomelo production. In 2013, according to the data of General Statistics Office of Vietnam, total area of pomelo had drastically increased during the period of 2002 to 2010 and had slightly decline din the last three years. However, pomelo production in Vietnam have constanly increased during 2002 to 2013. Area and production of pomelo in Vietnam increased from 13,500 ha with a yield of 69,900 tons in 2002 to 45,700 ha with a yield of 433,500 tons in 2013, respectively (Fig. 8). There are five provinces known for being the biggest pomelo producers in the country. These are Vinh Long (83,600 tons), Tien Giang (78,200 tons), Ben Tre (38,200 tons), Hau Giang (32,700) and Soc Trang (21,200 tons). Trend of national pomelo production during the period of 2002-2013 is shown in Fig. 8.
 
Concentrated zones of fruit
 
There are many varieties fruit in the Southern province, in which some of them are well-known and of high economic efficiency such as Hoa loc mango, Chu mango, dragon fruit (white flesh, red flesh), Nam roi pomelo, Da xanh pomelo, Java and Nhan rambutan.  These fruit have been favored in both the domestic and international markets. 
 
Some fruit with famous brands in the market are properly being invested by growers. There was initially the fruit production zones which was established to gradually improve productivity, product quality and produce high value crops.  Indeed, the fruit production zones can be able to supply the large output and meet the big orders of customer requirements. The concentrated production zones of selected fruits in Vietnam are shown in Table 2.
 
Fruit production calendar
 
Mekong Delta and the Southeast regions have many advantages in so far as fruit production is concerned. It has good conditions, climate, and water resources. The farmers also have appropriate experiences in the cultivation of fruit trees, and the application of new scientific and technical methods, especially in the flowering and fruiting phases of fruit production. Therefore, many kinds of fruit in the Mekong Delta can be harvested throughout the year, such as dragon fruit, mango, rambutan, pomelo and other fruit. This is a very important factor to ensure a stable supply of fruit products in the market. Currently, some fruit i.e longan, lemon, durian and watermelon in the Mekong Delta have almostly changed from the traditional to an all-year-round harvest.
 
May to July is specially treated as fruit festival months in Vietnam when almost all the major fruit are mature and available. Various fruit are also harvested in the Southeast region during this season. i.e. mango, durian, rambutan, pomelo and custard. Additionally, avocado, persimmon, strawberry are also in the Central Highlands region and lychee, plum, peaches are harvested in the North provinces which are also transported into the Southern provinces (Fig. 9). Besides, a large amount of fruit was imported into the country as apple, pear, orange, grape which come from China; mangosteens, langsat and tamarind from Thailand. Therefore, the huge fruit production was supplied to the market at the same period. The prices of fruit fluctuated highly, affecting the income of growers.
 
GAP standards for fruit
 
The introduction of GAP standards in Vietnam during the early part of 2000 was first applied in about about 40 ha planted to dragon fruit in Binh Thuan province. To meet the rising demands from customers and the domestic and international markets, the efforts had been made to develop safe standards for horticultural crops in Vietnam with the national VietGAP adoption. China, one of the largest markets of Vietnam’s agri-products, was recently required to provide a list of registered suppliers/farmers, packers and exporters. Nowadays, VietGAP has minimum requirements for horticultural production.
 
In recent years, growers have changed cultivation traditional practices to that of scientific and technical aspects of fruit production. They also established the farmer groups/ cooperatives to apply VietGAP or GlobalGAP standards.
 
According to the Department of Crop Production (MARD), by the end of 2013, total area of fruit which are GAP certificated reached 8,000 ha, with 7,520 ha which are VietGAP certified and 480 ha of GlobalGAP certified to 20 kinds of fruit. Table 3 lists selected fruit i.e dragon fruit, mango, rambutan and pomelo for certificated VietGAP/GlobalGAP standards.
 
FRUIT MARKET IN VIETNAM
 
Fruit products in Vietnam are mostly consumed as fresh in the domestic market which comprise 85% to 90% of the country's total fruit production.  Currently, the fruit supply chain in Vietnam is dependent on the private traders following price changes in the market. Fruit from producers to consumers goes through many intermediaries, increase in prices and poor competitiveness in the market.
 
Consumption and expenditure
 
The local market has a very important position in the country’s fruit consumption. The average fruit and vegetable consumption per capita in Vietnam is 78 kg/capita/year. The growth rate in fruit and vegetable consumption in the local market increased by 10%/annually.  As a result "Living Standards Survey 2010" of the Vietnam General Statistics Office showed that the average expenditure for fruit sharply increased from 30,200 VND/capita/year in 2002 to 297,600 VND/capita/year, which is 10 times more than in 2002. In the case of average vegetable expenditure in 2010 figures show that consumers spent 314,400 VND/capita/year,  nearly six times higher than in 2002, in which, the average fruit and vegetable expenditure in the urban area was 522,000VND/capita/year, contributing 4.5% of total expenditure and 418,800 VND/capita/year, accounting for 4.7% of total expenditure, respectively. For rural areas, the average expenditure for fruit and vegetable were 270,000 VND/capita/year and 204,000 VND capita/year, respectively. There is a positive relationship between income and household expenditure for fruit and vegetable. The higher the household income, the more is spent for fruit and vegetable. Fruit is consumed widely in the country. The highest fruit consumption in the country is in Hanoi and Ho Chi Minh City. Due to different regions and tastes of consumers, each type of fruit will be consumed in the specific markets (Table 4).
 
Vietnam’s fruit and vegetable export markets
 
Due to impact of the global financial crisis and the economic recession, the increased cost of material inputs, transport costs, and consumers' tightened spending, the country's fruit and vegetable export value still showed significant increase and continued growth in the last 15 years. Before the year 1998, the data source of fruit export value in Vietnam was not available.
 
The fruit and vegetable export in Vietnam had constantly increased during 1996-2013, but slightly decreased in 2001-2003. In terms of value, Vietnam fruit and vegetable export recorded the highest figure at US$1,040 million in 2013 (Fig. 10). There is an impressive growth in export value of fruit and vegetable from US$460 million in 2010 to US$1,040 million in 2013, respectively.
 
Vietnam’s fruit and vegetables were exported to more than 90 countries and territories worldwide (Fig. 11). In terms of export revenue, 2013 witnessed an impressive growth with the total fruit and vegetable export value of US$1,040 million. The highest share of value of Vietnam fruit and vegetable was exported to China (28.4%), Japan (8.2%), U.S. (4.9%), Russia (3.0%), Thailand (3.0%), Malaysia (3.0%), Korea (2.7%), Taiwan (2.4%) and Netherlands (2.3%).
 
Vietnam’s tropical fruit export value, 2008-2013
 
The results reveal that the fruit export value in the country drastically increased during the period of 2008 to 2013 (Fig. 12). The total value of tropical fruit export was estimated at over US$456 millions in 2013 (Table 5), compared to US$128 millions in 2008. The average growth rate in value of fruit export was 71.2% during the period of 1998-2013. 
 
The most important fruit export value in Vietnam in 2013 was dragon fruit (44.5%), lychee (4.3%), pineapple (4.0%), longan (2.8%), mangosteen (2.0%), jackfruit (1.8%), mango (1.7%), rambutan (1.6%) and pomelo (1.3%)  (Fig. 13). The value of specific fruit export from Vietnam was less than 1% of total fruit export. The total value of fruit export in the country was almost dominated by dragon fruit, with nearly 45% contribution in total value of fruit export in 2013.
 
Dragon fruit
 
Vietnam’s dragon fruit is strongly export competitive in the international market. Dragon fruit export in the country has grown strongly from US$59 million in 2010 to US$203 million in 2013. The average annual growth in value of dragon fruit export had increased sharply by 86% during the study period. At present, Vietnam’s dragon fruit is exported to more than 30 countries and territories worldwide. However, about 80-85% of the total export quantity of dragon fruit in the national level is routed to the China market through the border.   U.S., the Netherlands, Japan and Korea are other major importing countries of Vietnam’s dragon fruit.
 
Mango
 
Vietnam’s mango exports has constantly increased from US$3.6 million to US$7.8 million during 2010-2013 period. It has increased more than twice in terms of value. The major destinations of Vietnam mango exports in 2013 are Korea (50%), Japan (31%), China (7%) and U.S. (4%). The main by-products of mango exports in Vietnam are in frozen, puree and fresh forms.
 
Rambutan
 
Vietnam’s rambutan is also highly export competitive in the international market, especially during the off-season period (Jan to April). At the end of 1999, The U.S government permitted Vietnam’s rambutan to enter the U.S. market. They had also granted production code for the cultivation of Vietnam’s rambutan. This is a huge opportunity to boost Vietnam's fruit exports to the U.S. market. Rambutan is one of the major fresh fruit exports in the country. Export value of rambutan drastically increased during the period of 2010 to 2013. It was about US$7.1 million in 2013, increasing nearly 3 times compared to that of 2010. Currently, the main importers of Vietnam’s rambutan by value are U.S., China, Middle East countries and EU.
 
Pomelo
 
The existence of a big domestic market is the reason why Vietnam has not been very successful in pomelo exports. The export value of pomelo in Vietnam had increased by US$3.3 million during the period 2010-2013. It was about US$2.3 million in 2010 to US$5.6 million in 2013. The Netherlands is the leading destination for Vietnam’s fresh pomelo exports during 2013, accounting for 62% of its total exports value. Other major pomelo export destinations are Canada, Russia and Singapore.
 
 
TROPICAL FRUIT THROUGH VALUE CHAIN IN VIETNAM
 
Farmers
 
Land is the main natural resource for fruit production. The cultivated area of fruit in Vietnam accounted for 3.2% of the total agricultural land.  The average farmland for producing dragon fruit, mango, rambutan and pomelo were 0.42; 0.36; 0.45 and 0.38 ha, respectively, for which the minimum land area is 0.1 ha while the maximum is 2.6 ha. In 2013, the average production dragon fruit, mango, rambutan and pomelo win the aforesaid land sizes were 10.08 tons, 3.02 tons, 10.53 tons and 3.86 tons, respectively (Table 6). Generally about 91.5% to 96.2% of the harvested were sold and around 3.8% to 8.5% were wasted. The cause of wasting or not selling it, as stated by growers, were small sizes, diseases and damaged parts.

Mostly, fruit growers sold their fruit to village collectors. They haven’t thought about selling directly to local markets, wholesalers, packing agents, supermarkets, exporters and other retailers because they have no labor, no transportation, delayed payments and had no relationships so they didn’t know what to do with that. Some of them sent fruit to wholesalers/distributors. In the case of pomelo, there was about 46.7% growers who sold th fruit directly to packing agents, exporters, supermarkets and retailers because of higher profit, stable price and the right application of GAP so the fruit could meet the high standard of best fruit quality which is required in the international markets. In addition, the growers do not lose profits due to reduced standards level (from grade 1 to grade 2) by collectors.
 
Most of the growers sell the dragon fruit according to the grade standard.  But high propertion of growers selling mixed grades (Table 7), meaning they did sorting out of the fruit before giving them to buyers. The average percentage of sold dragon fruit according to grade A, B and C are around 54.2%; 37.8% and 8.0%; 55.2%; 33.6% and 11.2% for mango and pomelo of 43.6%, 42.3% and 14.1% of total the sold (quantity) of fruit (Table 7).  While, there were 100% of rambutan growers who sell all fruit (with 86.7% sell selected mixed grades and 13.3% who sell all mixed grades, damaged), and known record of growers who sell according to the grade standard. Collectors and wholesalers receive all grades even mixed ones. It was found that they wouldn’t reject the fruit sent by wholesalers and collectors because the farmers did not want to sell theirs fruit according to grades due to the remaining fruit which they cannot sell to other buyers. Most of them knew that dragon fruit, mango, rambutan and pomelo are for direct fresh consumption, in which few of the growers knew that the fruits will be used for processing.
 
Buyers determine the price of dragon fruit, mango, rambutan and pomelo in two ways. Mostly it was on the spot (seasonal) offer /bargain that about 90.0%; 83.3%; 80.0% and 71.7% of four selected fruit growers can bargain the price with the buyers. The others determine the price by contract agreement, the price is not fixed but just higher than 3% to 5% of the market price and depends on the prevailing price. The price which was determined by contract agreement is only used by fruit farmers adhering to good agricultural practices. 
 
In general, the price of selected fruit at the beginning were highest, then it greatly dropped off at the main season but afterwards it rose strongly at the end of the season (Fig. 14). The average price for mixed grades of dragon fruit at the beginning was VND 14,600/kg, at the main season VND 6,470/kg; at the end season VND 15,200/kg. Three different seasons of mango, rambutan and pomelo were VND 36,500/kg, VND 22,550/kg and VND 32,600/kg; VND 10,300/kg, VND 6,500/kg and VND 10,900/kg for rambutan and VND 24,640/kg, VND 18,250/kg and VND 23,890/kg for pomelo. 
 
Regarding the price, most growers (78.3% to 86.7%) said that it was fair or good. The reasons stated were that the fruit growers have good relationships with the buyers because they have sold their fruit to buyers for many years. Each farmer always has 2-3 loyal buyers. On the other hand, the mango, rambutan and pomelo growers have done a contract agreement with the wholesalers/cooperatives, so they can receive the good price. However, there were around 13.3% to 21.7% of growers who mentioned that this is unfair because they think the price was low although they have sold to another buyer and the collector reduced the level of grades when they are sorting out the fruit.
 
The seasonality/availablity of fruit, new variety and good agricultural practical standards are the main factors that detemine the highest price that the producers can sell. In addition, the bargaining strength of buyers, lack of market information and lack of transport mean those are not the main factors that detemine the highest price because there is a large number of collectors in the production areas. They can easily collect the market information, price fluctuation of fruit from the buyers and other growers by phone. However, they have also good relationships with buyers and they didn’t need to transport to sell their products since collectors come to them during harvest time.
 
About 83.3% of the dragon fruit growers followed price changes in the market by getting market information from collectors and 11.6% of them followed price changes from  wholesalers and members of cooperatives. Sharing market information among dragon fruit growers was 5.0%. Similarly, the price changes in the market of mango was 61.7, 26.7, 11.6%; 71.7%, 15.0%, 13.3% for rambutan and 60.0%, 28.3% and 11.7% for pomelo, respectively. The price volatility for selected fruit was very high with daily speed adjusment.  This means that price today could be different with the price tomorrow, and could even have hourly price fluctuations.
 
The most critical to a successful (both quality and quantity wise) harvest of dragon fruit are knowledge on how to control pests and diseases, information about prices and market demand and capacity development on production. In the case of mango, it pays to have the proper information on weather conditions (when the trees bring the flowers), prices and market demand and pests and diseases. Weather conditions, information about prices and market demand and capacity development on production are the biggest obstacles in rambutan production. In the case of pomelo the critical information needed are pests and diseases, availability of quality planting materials and capacity development in production.
 
Suggested solutions for the obstacles are adjusted according to the type of fruit (Fig. 15).  There is a need for an effective pest control technology and growers said that assistance from the expert/extension staffs/institute is important. Growers also need to be kept updated about market information, prices and market demand, and other kinds of information. They already joined in a group of rambutan producers (cooperatives), so every information is accessible to all the members in the group. Not only among them, but also the collectors who are informed about the price changes or market demand. The growers should also observe the market information, price fluctuations through mass communication. Regarding capacity development on production and application of GAPs, there should be guidance from a competent research institute/extension staff to enhance capacity building on production. They need transfer of technology in advance during the off-season of rambutan and mango production. They should only buy the seedings from trustworthy institutions because they lack technology information to produce quality of seedings. There should be uniformity of seed quality. The solutions for weather condition cannot be solved but growers have monitored and recorded the history of weather conditions through the years. Then, they can decide the appropriate time for fruit production. 
 
Collectors
 
In the beginning of the season, most of the dragon fruit collectors (almost 60%) harvest the fruit less than 1 ton/day, or about 20% of its capacity (1-2 tons/day).  Twenty percent of collectors have got more than 2 tons/day. About 70%; 20% and 10% of mango and pomelo collectors made up 1 ton/day, 1-2 tones/day and more than 2 tons, respectively. The rambutan capacity per day of 1 ton/day, 1-2 tons/day and more than 2 tons were 50%, 30% and 20%, respectively. This season, it’s hard to get more fruit that have the highest percentage of collectors which have less than 1 ton per day of production capacity. The greatest capacity occurred during the main season, in which most fruit collectors had the capacity of more than 2 tons/day. On the contrary, at the season’s end, the fruit availability was rare and had the capacity of less than 1 ton/day.
 
It seems that the availability of dragon fruit, mango, rambutan and pomelo at the end of the season isn’t a big deal for collectors. This is because there are many growers who produce fruit during the off-season. In addition, they also looked for the fruit not only inside their provinces but also to other provinces in the Mekong Delta region. So they can meet with the market demand in terms of capacity per day.
 
For the whole season in 2012 and 2013, the average capacity of selected fruit for each category of collector is shown in Table 8.
 
The fruit collectors almost buy the dragon fruit, mango and pomelo according to grades (grades A, B, C and remaing), while all of rambutan collectors buy the fruit as bulk purchase and sell them to a wholesaler/ distributor either in the district or in the wholesale market with the percentage sold around 98-100% of the total capacity. They sort out and package the fruit at the farm and send them to wholesalers. Then, the fruit will be sorted out by people hired by wholesalers/ distributors.
 
There are different average prices for mixed grades when buying the fruit during three seasons, which the price of dragon fruit fetches the highest during the end season of the year 2013 (an average of VND 15,200/kg). The price during main season is the lowest (an average of VND 6,470/kg). Interestingly, the price is higher in the beginning of the season (an average of VND 14,600/kg) than during main season, even almost reaching the same at the end of the season. The prices of mango, rambutan and pomelo in three different seasons of 2013 were VND 36,500/kg, VND 22,550/kg and VND 32,600/kg; VND 10,300/kg, VND 6,500/kg and VND 10,900/kg for rambutan and VND 24,640/kg, VND 18,250/kg and VND 23,890/kg for pomelo. 
 
All of the fruit collectors for dragon fruit, mango and pomelo send their fruit according to grades, while rambutan collectors send the selected mixed grades to a wholesaler/distributor either in district or in wholesale market with the minimum percentage sold around 98-100% of its total capacity. Every collector has different number of buyers but almost all collectors have 1-2 wholesalers and about 2-3 retailers. It may be the same buyers but with different percentage of fruit sold. All the collectors send the fruit to wholesalers with the percentage sold at 80% to 100% (100% means all of his fruit/ to grades and remaing fruit). Besides sending to a wholesaler, sometimes they also send to retailers as maximum amount of 20% of fruit sold which its grade B, C and the remaing fruit from sorting activity. There is no collector that sells directly to processing companies exporters, supermarkets and consumers.
 
The retailers offer the highest selling prices of fruit among the other buyers at the province but they are only bought in small quantity per day, irregular and grade B. On the other hand, the wholesalers can buy in large quantity per day. (regular and all of grade). This is an important factor to help their increasing fruit capacity during the peak season. The average dragon fruit selling price to wholesalers was VND 16,500/kg (garde A), VND 12,000/kg (grade B) and VND 7,800/kg (grade C) (Table 9) . Three different grades (A, B, C) of mango prices of selling to wholesalers were VND 38,500/kg, VND 25,750/kg, VND 15,000/kg and VND 30,200/kg, VND 20,500/kg, VND 12,450/kg for pomelo. In case of rambutan, the average the selling price of rambutan to wholesalers was VND 10,200/kg (mixed selected grades).
 
Collectors get their information on fruit price and changes in market prices mostly from wholesalers. Then, fruit collectors have the same price referral as the growers. However, the collectors are usually given just higher prices (VND 200-500/kg) to loyal growers who have long business with them.
 
There is only one type of price determination that is mostly done by collectors. It is on-the-spot (seasonal) offer/bargain price. The highest price is determined by seasonality/ availability of fruit, new varieties and applied GAPs standards by all of fruit collectors. As a collector, all of them don’t have any access to credit facilities. As explained above, all the collectors have no use for the collection center. Thus, most expenses for collectors come in the form of labor for harvesting fruit, maintenance and transportation cost. Mostly the fruit collectors transport the fruit to the wholesalers within the province by motorcycle. For those who sold the fruit to wholesalers or distributors in other provinces, fruit are transported by cars or trucks.
 
The biggest obstacles faced by fruit collectors as mentioned are, changes in information about prices and market by demand, operation space and transportation. These are the suggested ways to overcome those obstacles: search other suppliers, offer higher price to growers, do market research or ask others collectors to address the standard of market demand, rent the land with cheaper price and, use the motorcycle/ boat and just buy fruit from growers within the village/district.
 
Wholesalers
 
The wholesalers play an important role and are potentially powerful with large capital. In the province, wholesalers are mostly located along the road, with easier access to communications and transportation. They have five to 20 years of experience in running this kind of business. Their business is specified to a particular fruit or a few fruit commodities. There are three kinds of fruit wholesalers categorized into small, medium and large. It depends on the capacity of fruit purchasing per day. 
 
Fruit wholesalers belong to a small category which have average capacity of 1-3 tons per day. The medium category of wholesalers has average daily capacity of 3-10 tons. The wholesalers who belong to the "big" category based on average capacity per day has capacity of more than 10 tons per day. Most fruit wholesalers belong to the small and medium categories. The average whole capacity for each category of selected fruit wholesalers in 2012 and 2013 is showed in Table 10.
 
All wholesalers buy the fruit according to their grades but rambutan wholesalers buy fruit as bulk purchase (only selected mixed grades). They check out and have hired people repackage the fruit in their own collection center. 
 
The wholesalers mainly buy the fruit from collectors and growers either in the  village, district or provincial levels. Sometimes they also buy from collectors from other provinces specially when there is not much fruit.
 
The wholesaler has a starting price when buying the dragon fruit, mango and pomelo on average VND 17,500/kg, VND 43,000/kg and VND 32,000/kg for the grade A,; VND 12,000/kg, VND 32,000/kg and VND 21,000/kg for the grade B and VND 7,250/kg, VND 18,000/kg and VND 12,800/kg for the grade C, respectively (Table 11). In the case of purchasing price of rambutan at the beginning of the season, the price was pegged at VND 11,800//kg.
 
The price in the main season is the lowest. The buying prices of dragon fruit for the grade A, B and C are VND 8,000/kg, VND 5,000/kg and VND 3,100/kg; for mango VND 27,000/kg, VND 19,250/kg and VND 10,500/kg; for pomelo VND 24,000/kg, VND 16,000/kg and VND 9,000/kg, respectively. The lowest price of rambutan during the main season is VND 8,200/kg. Interestingly, the price is higher in the end season even almost reaching the same as in the beginning of the season as shown in Table 12.
 
Before sending the fruit to the buyers, all wholesalers re-sorted, re-graded and re-packed their fruit, the percentage of which were sold nearly 100% of the total capacity. Every wholesaler has different number of buyers but almost all wholesalers have 15-20 customers.  In fact, even the bigest wholesaler has more than 100 buyers.
 
In general, the wholesalers are to meet distributors, retailers, supermarket owners and exporters. There, most of them send their fruit to distributors (within province, provinces in the North, wholesaler market as Thu Duc, Binh Dien markets) with the amount of percentage sold at 70% to 100% total capacity. In the case of dragon fruit, most of them send the fruit to exporters with the amount percentage sold at 90% to 100% of the total capacity.
 
There are two ways to determine the price and price changes. The wholesalers, who have sold to distributors/retailers and directly referred by their customers to decide the purchasing price from the collectors or growers. They also get the information about price changes and market demand by communicating with a person working in the wholesale market. The other wholesaler, who have sold to supermarkets just get the price information from their customers (supermarkets). But, in the case of dragon fruit, all of them get their information about price changes and market demand in the international market because the quantity of pomelo exported is large and are much affected by the price of dragon fruit in the domestic market.  Both of them determine the price from collectors/growers by only on-the-spot (seasonal) offer/current demand with the percentage of 100% total capacity. The wholesalers pay the collectors immediately, but sometimes, they also pay them after 1-3 days. The factors which determine the highest price are seasonality/availability of fruit, new varieties and applied GAPs standards.
 
The wholesalers who have sold to wholesale markets said that the biggest obstacles they face as fruit wholesalers are information about prices and market demand, relationships with buyers and transportation. In the case of wholesalers who have sold the fruit to supermarkets, they mentioned that their biggest obstacles as fruit wholesalers are: limited information on GAPs production and finance and credit facilities (also for VAT tax), and small and low quality fruit.
 
The biggest obstacles of fruit wholesalers who play a role as packing agents and suppliers to exporters are information about prices and market demand, small and low quality fruit, high operation cost, limited GAPs production and finance and credit facilities. The solutions for theses obstacles as mentioned by both wholesalers are: supply of fruit during off-season, building the collection center in the production area, contract agreement with cooperative/group farmers to produce the GAPs fruit, contract with buyers, selling to the local market and own transportation.
 
CONCLUSION
 
The advantages for natural conditions, climate, water resources and good experiences in the cultivation of fruit trees enable Vietnamese farmers to produce a wide range of tropical fruit. There are more than 40 species of fruit in the country. The total area of all fruits crops is  832,720 ha, with production of 7.6 million tons. The production of fruit crops in Vietnam has specific characteristics in different regions. The expansion of domestic and international markets, especially markets in the U.S., Japan, Korea and E.U for many kinds of fruit is a good opportunity for Vietnam fruit development.  In 2013, Vietnam fruit and vegetable export was recorded highest at US$1,040 million sold to more than 90 countries and territories worldwide. The seasonality/availablity of fruit, new varieties and GAPs were the main factors that determined the highest price. There is great need to improve market access through marketing information system, technical training courses on fruit production in off-season and management and control of pests and diseases, implementing GAPs standards. Government should support credit to build the collection centers and packing houses,  improve and strengthen logistics and promotion exports.
 
REFERENCES
 
  • Luong Ngoc Trung Lap, 2013. Smallholder integration into tropical fruit value chain: case study – rambutan and pomelo in vietnam. Presentation at the Internation Workshop on Policy Intervention to Facilitate Smallholder Integration into Tropical fruits markets/ Value chains, 5-6 July 2013, Victory Hotel, Ho Chi Minh city, Vietnam.
  • Luong Ngoc Trung Lap, Nguyen Minh Chau, Nguyen Van Hoa, 2013. Demand trend, Market, Price Development and Promotional requirements for Dragon fruit. Presentation at the International Symposium on Superfruits: Myth or Truth? 1-3 July 2013, Victory Hotel, Ho Chi Minh city, Vietnam. Session 2 “Getting Superfruits to Market”.
  • Nguyen Minh Chau, 2007. Present scenario, Market trends of the Tropical and Subtropical Fruit Industry in Vietnam. Presentation at the Internation Seminar on Economics and Marketing of Tropical and Subtropical Fruits, 16-18 July, 2007, Kuala Lumpur, Malaysia.
  • Nguyen Quoc Hung, Luong Ngoc Trung Lap, 2012. Vietnam’s improvement program on Pomelo from production to export. Presentation at the Internation Workshop on Value chain Enhancements to improve Market Access for Minor Tropical fruits in The Philippines, 3-4 October, 2012, Grand Regal Hotel, Davao city, Philippines.
  • Nguyen Thanh Hieu, Luong Ngoc Trung Lap, Nguyen Van Hoa, Nguyen Minh Chau, 2012. Development of the Pitaya into an export commoditiy in Vietnam. Presentation at the Internation Workshop on Value chain Enhancements to improve Market Access for Minor Tropical fruits in The Philippines, 3-4 October, 2012, Grand Regal Hotel, Davao city, Philippines.
  • Pham Van Du, 2010. Present situation and solution for future production development and market for Vietnam fruits. 1st Vietnam Fruit Festival, International Workshop on Vietnam Fruits: Opportunities and Challenges in the context of International Economic Integration. 20 October 2010, Tien Giang, Vietnam, p. 60-70.

 

Fig. 1.  Fruit production zones in Vietnam.

 

 

Fig. 2.  Trend in area of fruit in Vietnam, 2000-2013

Source: Department of Crop Production (MARD), 2014

 

 

Fig. 3.   Category structure of fruit in Vietnam, 2013.

 

 

Fig. 4.  Fruit production in Vietnam by category, 2013.

Source: Department of Crop Production (MARD), 2014

 

 

Fig. 5.  Trend in area and production of dragon fruit in Vietnam, 2000-2013.

 

 

Fig. 6. Trend in area and production of mango in Vietnam, 2000-2013.

 

 

Fig. 7.  Trend in area and production of rambutan in Vietnam, 2000-2013.

 

 

Fig. 8.  Trend in area and production of pomelo in Vietnam, 2000-2013.

 

 

Fig. 9. Selected fruit production calendar.

Source: SOFRI, 2013

 

 

Fig. 10. Vietnam’s fruit and vegetable export value, 1996-2013.

Source: Vina Fruit and Ministry of Industry & Trade, 2014 

 

 

Fig. 11. Share of Vietnam’s fruit and vegetable export value by market, 2013.

Source: Ministry of Industry and Trade, 2014

 

 

 

Fig. 12. Vietnam’s tropical fruit export value, 2008-2013.

Source: Ministry of Industry and Trade, 2014

 

 

 

Fig. 13. Composition of fresh fruit exports by value, 2013.

Source: Ministry of Industry and Trade, 2014

 

 

Fig 14.  Average price for mixed grades of selected fruit in three different seasons.

 

 


Fig. 15.  The obstacles on producing of selected fruit in Vietnam.

 

 

Fig. 16. The percentage of fruit collectors based on the capacity for selected fruit per day in three different harvest times (beginning, main, end).

 

 

 

 

Table 2. Concentrated production zones of selected fruit in Vietnam

 

 

Table 3. Certificated VietGAP/GlobalGAP of selected fruit in Vietnam

(The data update to end of the year 2013)
 
 
 
 
Table 4. Domestic market segmentation of selected fruit
 
 
 
 
Table 5. Export value (x million US$) of selected fruit in Vietnam, 2010-2013
 
 
 
 
Table 6. Farm-scale, production, sold and wastes of selected fruit in Vietnam
 
 
 
 
Table 7. Classified selling selected fruit based on grades

 

 

Table 8. The average whole capacity for each category of selected fruit collector

unit: tons

 

 

Table 9. Average price of sale based on grades

 

 

Table 10. The average whole capacity for each category of selected fruit wholesalers
Unit: tons
 
 
 
 
Table 11. The average price of sales based on grades
 
 
 
Table 12. Three different purchasing price of wholesaler in three grades and seasons