HANOI: Vietnam has received permission to export litchis to the US and Australian markets, but exports remain very modest. Vietnam, litchi, export markets, China
Nguyen Thanh Lap, former general director of An Phu Radiation JSC, noted that Vietnam’s litchis were less competitive than China’s in oversea markets because of higher selling prices.
China buys Vietnamese litchis to export to other countries, but it still sells them at lower prices. Vietnamese farmers sell litchis to Chinese merchants in large quantities and for low prices, about VND10,000 per kilo.
Meanwhile, Vietnamese merchants exporting litchis to the US buy litchis from farmers at prices VND5,000-10,000 higher per kilo.
As such, there exists a big gap in the input material prices at which Vietnamese and Chinese businesses buy from Vietnamese farmers.
In general, Chinese buy litchis in large quantities to enjoy good prices. For every 1,000 tons they buy, they can select 300 tons of the best quality and re-export to the US and Australia for big profits.
Meanwhile, Vietnamese businessmen, who have to pay higher prices than Chinese, can select 60-70 tons out of every 100 tons. As the cost prices are higher, they have to sell at higher prices.
Lap said the costs Vietnamese spend on irradiation and packaging are not considerable, which are nearly the same as paid by Chinese. However, the transport costs are different. Vietnamese exporters are mostly small and medium sized enterprises, while the export volumes are small.
Lap said Vietnam has exported about 100 tons only this year, which is just equal to one consignment of litchis exported by Chinese. Thus, Vietnamese cannot save on transportation costs.
With higher costs for input material and transportation, this is understandable why Vietnamese are inferior to Chinese in the world market.
Only several Vietnamese enterprises export litchis in small quantities (1 ton per container) to the US and Australia by air.
Meanwhile, Chinese export litchis by sea and in large quantities (10 tons per container). Vietnamese have to pay $4.2 per kilo to ship litchis by air, while Chinese have to pay $0.2 per kilo only.
Vuong Dinh Khoat, chair of Hugo, an import/export company, also noted that it is very difficult for Vietnamese fruits to compete with other countries in choosy markets like the US and Australia.
“Enterprises have to spend big money to follow the procedures and satisfy the technical requirements set by the two sides,” he noted.
“Vietnamese exporters, for example, have to pay for US supervision of the irradiation technique. Meanwhile, the transport cost is high,” he explained.
