Dien pomelos on supermarket shelves in the UK. (Photo: VNA)Under the UKVFTA, 100% of tariffs on fresh and processed fruitsand vegetables were eliminated on January 1, 2021.
The trade deal helped increase Vietnam’s export of fruits andvegetables to the UK significantly in the past two years despite fallingconsumption demand among British consumers due to the impacts of economicslowdown and inflationary risk, Nguyen said.
He cited statistics that Vietnam exported 20.9 million USD worthof fruits and vegetables to the UK in 2022, registering an increase of 8% against2021 and accounting for 10% of the total fruit and vegetable export to Europe.
In the first half of this year, the export of fruits and vegetablesto the UK increased 28.3% to 11.48 million USD.
According to Vietnam Industry and Trade Information Centre, fruitsand vegetables were the 20th largest export product category to the UK in January– July, accounting for 0.46% of the country’s total export turnover.
Recently, several fruit specialties of Vietnam have been broughtto supermarket shelves in the UK such as Dien pomelos, Tan Lac red pomelos and Cao Phong oranges.
The expansion of Vietnamese fruits and vegetables to the UK markethas demonstrated that the country’s production capacity of farm produce isimproving in terms of quality, as the UK is a very demanding market with highrequirements for food hygiene and safety.
Enjoying tariff liberation under the UKVFTA, many Vietnamese fruitand vegetable products being imported to the UK have competitive advantagesagainst those of Thailand, Malaysia and Brazil, which have not had bilateraltrade agreements with the UK.
Still, Vietnam held a modest share of the fruits and vegetablesmarket in the UK, which imports from around 100 countries, Nguyen said.
The Industry and Trade Information Centre’s statistics showed thatthe UK’s import of fruits and vegetables from Vietnam accounted for less than0.1% of its total import value.
One of the causes for modest presence of Vietnamese fruits andvegetables in the UK market was the lack of national, corporate and productbrands, Nguyen pointed out.
Many products were being exported to the UK under British brandsor foreign brands, Nguyen said, adding that there were not many enterprisesfrom Vietnam with huge production capacity and reputed brands participating inthis market.
He said building brands for Vietnamese fruits and vegetables inthe UK market became vital for the industry to be able to tap the opportunitiesfrom the UKVFTA.
Enterprises were aware of the important role of brand building toexpand in the UK but there was still a lot of work to do, Nguyen said.
Build brand, diversify markets
The UKVFTA together with other new – generation FTAs were bringinghuge opportunities for Vietnam to build brands and diversify markets for fruitsand vegetables.
Although Vietnam’s fruits and vegetables export was poised to seta new record high this year, at around 5 billion USD after reporting anincrease of 72% to reach 4.2 billion USD in January – September, diversifyingmarkets was important for the industry as Vietnam remained dependent on theChinese market for 65% of the fruits and vegetables export.
According to the Import – Export Department under the Ministry ofIndustry and Trade, to take advantage of the FTAs, the most important thing isto build brands in the processing ecosystem coupled with green production,which will help both increase added value and overcome barriers for marketentry.
An estimation by the Ministry of Agriculture and Rural Developmentshows that more than 70% of fruits and vegetables of Vietnam were exportedfresh or simply processed.
Meanwhile, the demand for processed food is increasing globally.
According to market insight by Statista, revenue in the processedand frozen fruit market amounts to 64.54 billion USD in 2023. The market isexpected to grow annually by 7.19% in the 2023-2028 period.
There are about 150 plants grown for fruit and vegetableprocessing using modern technology in Vietnam, with a total capacity ofprocessing nearly 1.1 million tonnes per year, or just around 10% of the country’stotal fruit and vegetable output.
Nguyen Quoc Toan, Director of the Ministry of Agriculture andRural Development’s Centre for Digital Transformation and AgriculturalStatistics, said that besides fresh products, the fruit and vegetable industryshould invest in processing to increase added value and diversify products tobetter meet global consumer demand.
Policies should be raised to encourage the establishment of valuechains for fruits and vegetables as well as attracting investments in deepprocessing and applying modern technology in production, said Nguyen.
Vietnam should build brands for fruits and vegetables based onquality, he stressed.
Expand in the UK
With the UKVFTA, Vietnam was having advantages in exporting fruitsand vegetables to the UK, Nguyen said.
For market entry and expansion in the UK, Vietnamese fruits andvegetables must meet requirements of food hygiene and safety. Besides, the UKalso set standards for green production.
Nguyen urged enterprises to firstly study British consumer tastesto develop strategies to expand into this market. British consumers were highlydemanding for product quality, design, taste, origin traceability and issuesrelated to environment protection and sustainability.
Building growing areas that meet requirements for export to the UKwas important. Besides, crop varieties must also be improved to produceproducts that meet consumer tastes.
Enterprises must also invest in processing, preservation andpackaging technologies so that Vietnamese fruits and vegetables could be broughtaround the world without worries about impacts on quality.
Nguyen also urged trade promotion to be enhanced to helpVietnamese firms find customers and partners in the UK.
The Government should issue policies to encourage enterprises toinvest in processing and apply modern technology in production to meet therequirements of the UK market, Nguyen said./.
VNA
