Meanwhile, Vietnam still mostly sells fresh fruit and the proportion of processed fruits remains modest.

Producing vegetables and fruits is a strength of Vietnam’s agriculture, while processing is a solution which not only helps increase their value but also stabilize market prices.

In the past, Son La was known as a mountainous province which mostly grew maize and cassava. But now it is the largest fruit area in the north with 82,800 hectares. It has also become a large farm produce processing center in the northwest. This explains why many provinces have to call on people to buy their products in harvesting season, while Son La does not.

According to the deputy director of the Son La Department of Agriculture and Rural Development, the provincial authorities have set policies to develop the farm produce processing industry.

In the 2021 longan season, the province applied a policy on supporting cooperatives and business households to build farm produce dryers and cold containers. This allowed farmers to process 65,000 tons of longan and ease pressure on the contribution during the Covid-19 pandemic.

Son La also attracted investors to build linkage chains and processing workshops in the locality, such as Nafood and Doveco. Thanks to this, local farm produce can be consumed more easily and new farm produce brands have been built.

However, the proportion of processed fruits in Vietnam remains very modest.

A report showed that Vietnam’s vegetable and fruit output is 28 million tons a year, but only 12-17 percent is processed, while more than 76 percent is exported raw. As the produce is consumed as fresh fruit or preliminarily processed, the post-harvesting loss is relatively high.

Ngo Quang Tu from the Agro Processing and Market Development Authority said there are 157 processing facilities with the capacity of 1.1 million tons of products a year and the factories are thirsty for materials all year round.

There are also thousands of preliminarily processing workshops on small and tiny scale owned by cooperatives and business households. However, the processing facilities lack capital, and have difficulties in finding production premises and applying post-harvesting technology, which result in the post-harvesting loss of over 20 percent.

Diversifying products to satisfy demand

Vu Kim Hanh, chair of the Vietnam's High Quality Goods Business Association, said consumption habits in the world have changed and people want food which is good for health and is convenient to use. As people work online and stay at homes for a long time because of the pandemic, the demand for processed food has been increasing. Food processing technology needs to be increasingly deep, diverse and multifunctional.

Tran Van Cong, Vietnam’s agriculture counsellor to Europe, said that Europe is a large market which imports about $120 billion of vegetables and fruits a year. However, Vietnam can only export $190 million worth of products to the market.

More Vietnam’s businesses have recently made processed products to export to the market. He believes that Vietnam can access the European market with frozen and canned fruits.

However, he warned that Europe is a choosy market which applies very strict import inspection methods. One of the important criteria that Vietnam’s products must have to export to Europe is  low level of plant protection chemical residue. Products also need to have good design and packaging, and be friendly to the environment. 

Nguyen Quoc Toan, head of the Agro Product Processing and Market Development Authority under the Ministry of Agriculture and Rural Development (MARD), said that in order to penetrate a market and cement positions, it is necessary to understand market signals.

The consumption tendency has changed with people now focusing on plant-origin products. After the pandemic, consumers tend to use high-quality, flexible, multi-use and higher value products. Vietnam must have the technologies which can satisfy the changes.

Regarding growing areas, he thinks that in addition to large enterprises, Vietnam needs to encourage small and medium enterprises (SMEs) and cooperatives, and that there should be a policy on linking material growing areas to optimize the operation of supply chains.

He said that Vietnam needs to promote investments in four processing fields – large processing factories; small and medium processing workshops; by-product processing facilities; and logistics centers.

Tam An