The world is in great demand for processed fruit and vegetable products. However, Vietnam’s fruit and vegetable processing industry is undeveloped, causing enterprises to “drop” billions of dollars.

New processing rates reach 12 – 17%

According to the Ministry of Industry and Trade, each year, the EU market imports about 120 billion USD of vegetables, accounting for 40% of the total export turnover of global fruit and vegetable imports. Although Europe has a large demand for vegetables, Vietnam’s export to Europe is only 190 million USD, accounting for 0.36% of the EU’s imports.

Post-harvest fruit processing for export. (Photo: Internet)

Explaining the reasons why the turnover of fruit and vegetable exports to the European market accounts for a small proportion, the Director of the Industrial and Commercial Information Center (Ministry of Industry and Trade) – Mr. Pham Hung said that fresh products are about 70% of the structure of fruits and vegetables exported to Europe, processed products are only 30%.

“Vietnamese fruit and vegetable production reaches 31 million tonnes but the processing rate is only about 12 – 17%, which makes 76% of exported vegetables still in fresh or pre-processed form. While the dietary needs of people around the world in general, Europe, in particular, is heading towards the use of processed fruits and vegetables. This is the reason why the export turnover of Vietnamese fruits and vegetables only accounts for a low proportion ” – Mr. Pham Hung stated.

Mr. Nguyen Manh Hung – Chairman of the Board of Directors of Nafoods JSC said that: the Ministry of Agriculture and Rural Development, Ministry of Industry and Trade should propose budget resources to prioritize supporting enterprises to invest in cold storage systems, technological innovation, and development of fruit and vegetable processing plants. The enterprises also need the authorities to manage the planning of reasonable planting areas, avoiding the shortage of raw materials.

Analyzing the reasons why Vietnam’s exported vegetables are mainly unprocessed, the Director of the Agricultural Mechatronics & Post-harvest Technology Institute (Ministry of Agriculture and Rural Development) Pham Anh Tuan stated that:

Vietnam currently has only 7,500 ultra-small-scale fruit and vegetable processing establishments, households, and 150 modern technology factories with a processing capacity of nearly 1.1 million tonnes/year, so only processes about 8 – 10% of fruit and vegetable production per year.

In addition, the cultivation area is mainly small, scattered, and processed seasonally (2 – 3 months/year), causing raw materials to only meet 50 – 60% of processing capacity. The food safety of Vietnamese agricultural products has not been ensured evenly in terms of size, taste, and nutrition, which has caused considerable difficulties for post-harvest processing.

 Untie the knots

According to economic experts, post-harvest processing is the key to increasing the value of agricultural products. General Director of G.C Food JSC – Mr. Nguyen Van Thu commented that the fruits after processing can improve the export value.

“Dried coconut, farmers can only sell for VND 5,000/kg but coconut jelly costs VND 25,000/kg, which is the added value from the processing industry” – Mr. Nguyen Van Thu gave an example.

Representatives of the Industrial and Commercial Information Center (Ministry of Industry and Trade) also said that developing the fruit and vegetable industry towards processing not only helps control the cost but also increases the value of goods by 3-4 times compared to fresh goods. In particular, this also helps to increase the storage time of agricultural products and free the local surplus of supply.

Vegetable processing capacity is limited, exports “drop” billions of dollars. (Photo: Internet)

However, doing this requires a large investment cost, while most fruit and vegetable processing enterprises are very small (more than 80% of establishments under 2 billion VND); The post-harvest preservation has not been focused leading to post-harvest losses of more than 20%.

Many enterprises in the field of post-harvest fruit processing said that only about 30% of enterprises have access to bank capital, the remaining are small and medium scale, so access to loans is not easy.

Mr. Nguyen Minh Phong, an economic expert, said that it is necessary to identify objects, products, production scale, investment capabilities, and target markets, then select suitable equipment and technology consultants, and invest in factory construction.

Proposing solutions to remove difficulties for enterprises, the Director of the Agricultural Processing and Market Development Department (Ministry of Agriculture and Rural Development) Nguyen Quoc Toan said that: it is necessary to reorganize production and raw material areas in the direction of promoting production connection in chains to ensure raw materials for processing. In addition, it is required to study and issue legal documents on chain management, regulations on coordinating connection activities, and improving the capacity of processing and preserving vegetables.

From the corner of an enterprise, the General Director of Vinamit JSC – Mr. Nguyen Lam Vien proposed that to promote fruit and vegetable consumption, localities need to create a transparent information system, build a hub to receive and allocate information in the growing areas, thereby, control product quality and form large-scale raw material areas.

In agreement with this opinion, the General Secretary of the Vietnam Vegetable Association – Mr. Dang Phuc Nguyen proposed that in the upcoming time, the Government, ministries, and sectors should support localities to plan the processing zones. In addition, there should be policies to encourage investment, and support capital sources as well as technology transfer. In particular, it is necessary to support capital, and connection between farmers and enterprises to build effective and sustainable linkages in raw material areas; Strengthen the management of growing areas, quality management of materials, seedlings, and the production and processing process to ensure product quality.

Recommendations of enterprises and management agencies show that to improve the turnover and export value of fruit and agricultural products, the State is required to support enterprises to innovate technology; develop processing plants associated with raw material areas, thereby facilitating transportation, processing, and consumption of products in the domestic and export markets.