High air freight costs hinder Vietnamese fruit exports

Fruit exports from Vietnam to European countries are subject to a US$3.2 per kilogram shipping fee, 44% higher than Thailand’s at $1.8, Dam Quang Thang, CEO of Agrice VN, told Thanh Nien newspaper. Thang’s company is exporting mango, longan, dragon fruit and lychee at a cost up to three times higher than their price at farmer’s garden.

Exports to Shanghai, China are also facing high air freight fee of US$1.8 per kilogram, while the cost is US$2.6 from Vietnam to Australia, Thang said.

As fruits are preferred to be consumed fresh, shipping by sea is not appropriate as the long duration can rotten the produce. However, high air freight costs are pushing up prices of Vietnamese agricultural products overseas, said Ta Duc Minh, Vietnam’s commercial counsellor in Japan at an agriculture conference in February.

In Japan, Vietnamese mango is priced higher than that of Ecuador and Thailand, even though the distance from Vietnam to Japan is shorter compared to those countries, Minh said.

Additionally, promotion of agricultural trade is also facing many difficulties due to the increase of protectionism in countries such as the US, China, Japan and the European Union, said Tran Van Cong, deputy director of the Department of Agricultural Product Processing and Marketing under the Ministry of Agriculture and Rural Development.

Negotiations to open foreign markets to Vietnamese agricultural products are difficult and usually take five to seven years to complete. Competition is increasingly fierce in terms of price, quality, design and food safety, Cong said.

Vietnam’s agriculture products export turnover reached US$36.3 billion last year. This year, the country plans to reach US$40.5 billion.