Dragon fruit exporters undercut themselves out of US market

Dragon fruit exporters undercut themselves out of US market

A woman in front of the dragon fruit selection at a supermarket in Ho Chi Minh City. The success in exporting dragon fruit to the United States has turned out to be short-lived because of unhealthy competition among businesses and the lack of irradiation services in Vietnam, exporters said.

After the US opened its market to fresh dragon fruit from Vietnam last July, three shipments totaling nearly five tons were sent to the US in November at US$4-4.5 a kilogram. But now export to the US has ceased, with exporters no longer interested in the market, Le Tan Thi Viet Thanh, director of Ho Chi Minh City-based Bao Thanh Company, said. A director of a fruit export company, who wished to be unnamed, said after exporters competed with and undercut each other, prices fell by half since the end of last year, to just $2-3 a kilogram. “At such prices exporters cannot earn profits unless they cheat by packing low-quality products,” the director said. Dinh Van Huong, chairman of the Vietnam Fruit Association, had said last year the US was a promising fruit market, importing fruit worth about $17 billion a year. Ly Hai Long, export manger at Bao Thanh Company, said Vietnamese exporters should have cooperated to keep their prices at high levels, but some of them chose to sell cheap to cause difficulties to those who had invested a lot of money. Nguyen Huu Huan, deputy head of the Ministry of Agriculture and Rural Development’s Plant Protection Department, told Thanh Nien Monday his department is not aware of any conflict between dragon fruit exporters and “even if there is one, [it] cannot intervene.” The export of the fruit to the US has been stalled because exporters are trying to improve their technologies, he said, noting the fruits are not preserved well and thus spoil easily. Tran Ngoc Hiep, director of Binh Thuan Province-based Hoang Hau Dragon Fruit Farm Company, said the fruits can only be preserved for 40 days but it takes 30 days to have them harvested, processed and transported to the US. “By the time the fruits reach the US, there are only 10 days left to sell them.” Vietnam Fruit Association General Secretary Nguyen Van Ky said exporters do not send their goods by air because it costs $3 for a kilogram. In Thailand, it is only $0.50, he said. The situation is worsened by the lack of facilities to irradiate the fruits, a safety condition that Vietnamese exporters must meet. Nguyen Ngoc Hai, director of the Binh Thuan Province Department of Agriculture and Rural Development, said dragon fruit exporters in the province receive many orders from the US but cannot sign contracts because they cannot get their products irradiated. Nguyen Thuan, head of the Ham Minh Dragon Fruit Cooperative, said his company has asked HCMC-based Son Son Joint Stock Company for irradiation services many times but in vain. Tram Trong Ngan, general director of Son Son Company, said his company had to decline irradiation orders from customers since there is a technical problem at his factory that may take a long time to fix. Son Son is the only firm in Vietnam certified by the US Department of Agriculture’s Animal and Plant Health Inspection Service (APHIS) to provide the service. But at $1 a kilogram it is too expensive for dragon fruit producers. A project to build an irradiation facility in southern Binh Duong Province has not been completed yet. “If Son Son could not provide its irradiation services any longer, why did it not give advance notice so that we did not invest so much to meet US standards?” Thuan asked. He said with the door to the US market closed, the high-quality dragon fruit purchased by his cooperative had to be exported to China instead at lower prices. Not only exporters but farmers have also been hit hard by the export hurdle. Thuan, who is also the deputy chairman of Binh Thuan Province Dragon Fruit Association, said farmers can now only sell their dragon fruit at VND12,000-12,500 ($0.68-0.71), compared to VND19,000-20,000 when the fruit was exported to the US. Binh Thuan is Vietnam’s main dragon fruit cultivation area, accounting for more than 70 percent of the country’s supply. Source: TN, SGTT