A Green Revolution: Agricultural Exports to China Set to Soar

During the state visit to China by the General Secretary and President To Lam, the Ministry of Agriculture and Rural Development and the General Administration of Customs of China signed three protocols for three commodities: frozen durian, fresh coconuts, and farmed crocodiles.

Market Opportunities

Mr. Truong An, Executive Director of An Thinh Phat Agri (Ho Chi Minh City), a company specializing in Musang King durian with successful exports of frozen shipments to the US and Australian markets, shared that inquiries from potential partners for exports to China have skyrocketed, despite a lack of specific information on regulations and official timing for exports.

According to Mr. An, Musang King durians need to be harvested at a later stage of ripeness, making air freight the only option for exporting to China, which is costly. If harvested at the same stage as Dona or Ri 6 durians for road transportation to China, they won’t taste as good when ripe. Now that frozen durian imports are permitted, Vietnamese Musang King durians can compete very well with rivals in terms of both price and quality.

Mr. An added that the segment of frozen durian in Vietnam is still new, especially in terms of technology and infrastructure, due to high requirements for food safety. Thus, only businesses with strong financial capabilities and a minimum investment of $1 million can enter this segment, avoiding price wars common in the fresh durian market. This also improves the overall durian industry’s output.

Mr. Dang Phuc Nguyen, Secretary-General of the Vietnam Fruit and Vegetable Association (VINAFRUIT), said that in 2023, China spent over $1 billion on importing frozen durian from Thailand and Malaysia. Vietnam’s entry into this market in the first year could capture sales of $200-300 million. However, based on the experience of signing the protocol for fresh durian, it may take 2-3 months before the first shipment is exported. Therefore, the earliest we can expect a shipment of frozen durian to China is the end of this year. A similar timeline is expected for fresh coconuts, so we can anticipate an explosion in export revenue starting in 2025.

“To seize this market opportunity, businesses need to invest in good freezing technology and convenient, eye-catching packaging to enhance their competitiveness. This is also a chance for Vietnamese durian to build its brand with Chinese consumers,” said Mr. Nguyen. The leader of VINAFRUIT also stated that in the future, China will increase its imports of frozen durian arils because they are convenient, eliminate waste (peels) at the source, and reduce transportation costs. Therefore, frozen durian could become the main and high-value product instead of fresh durian, which is the current focus.

Fresh Coconuts and Crocodiles Accelerate

Mr. Cao Ba Dang Khoa, Secretary-General of the Vietnam Coconut Association, stated that the official export of fresh coconuts to China marks a new step forward for the coconut industry. Currently, the coconut-growing area is expanding in many places, offering advantages such as ease of cultivation, low investment costs, and convenient output.

“Just two days ago, I accompanied a delegation of 14 Chinese coconut processing companies on a field trip to Vietnam’s coconut industry, introduced by the Chinese Embassy in Vietnam. They were very interested in direct purchases after having to go through intermediaries due to the absence of official import permission,” said Mr. Khoa.

According to Mr. Khoa, China is very strong in coconut processing, but it only has a coconut-growing region in Hainan Island and must import raw materials from Southeast Asian countries, including Vietnam. With the signing of the protocol, Vietnamese coconuts can establish themselves in the Chinese market and begin building their brand there. Vietnam exports over $300 million worth of coconuts and coconut products to China annually, and this figure is expected to grow by 10%-15% yearly post-protocol.

What’s crucial for the coconut industry is to delineate raw material-growing areas and maximize these areas to increase farmers’ incomes and reduce competition for raw materials between domestic and foreign factories. Exporting deeply processed coconut products will bring higher added value than exporting raw materials.

In the crocodile industry, Mr. Tran Hung Quoc Viet, Deputy Executive Director of Ton Phat Company (Ho Chi Minh City), which has a total crocodile population of 8,000, expressed his delight at the signing of the Protocol on Quarantine and Health Requirements for Farmed Crocodiles Exported from Vietnam to China. He also hopes for specific legal guidance and procedures for obtaining permits to expedite exports. According to Mr. Viet, the crocodile farming industry suffered heavy losses after COVID-19, so access to preferential loans is crucial for herd recovery and seizing the newly opened market opportunities.

Mr. Ton That Hung, Director of Hoa Ca Crocodile Company (Ho Chi Minh City), shared that their total crocodile population is close to 5,000, mainly serving crocodile leather and gallbladder businesses and breeding. Crocodiles take six years to reach sexual maturity and produce one clutch per year, and it takes one to two years for crocodile hatchlings to be ready for sale. Therefore, increasing the crocodile population requires time and initial support from the government to revive the industry.

Data from the Ho Chi Minh City Forest Ranger shows that the city currently has only 12 crocodile farms with 36,221 crocodiles, a decrease of four farms but an increase of over 1,000 crocodiles compared to the end of 2023, indicating a recovery as Vietnam negotiates to open the Chinese market for crocodiles.