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High air transport fees stymie fruit exports

VietNamNet Bridge - Vietnam hopes it can export $2 billion worth of fresh fruit this year, but analysts doubt the goal is attainable, as high air transport fees have made it difficult to penetrate foreign markets.
VietNamNet Bridge - Vietnam hopes it can export $2 billion worth of fresh fruit this year, but analysts doubt the goal is attainable, as high air transport fees have made it difficult to penetrate foreign markets.


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Vuong Dinh Khoat, general director of HCM City-based Hugo Company, said in Tuoi Tre that the high shipping cost has caused problems.

Hugo plans to export longan and dragon fruits to the US. He has been told that he would have to pay $3.4-3.6 to ship a kilo of fruits by air. 

The current shipping fee is lower than last year, at $4.5-4.8 per kilo. However, it remains a big problem.

“The air transport cost alone costs 50 percent of the selling price,” he complained.

Tuoi Tre also quoted Prof Nguyen Quoc Vuong, a lecturer and researcher at RMIT University in Australia, as saying that transport fee accounts for a very high proportion of Vietnamese fruits’ prices.

He said it cost $2.95 to carry a kilo of litchis from Vietnam to Australia by air, which accounted for 42.2 percent of the selling price.

A report by the Ministry of Industry and Trade (MOIT) showed that Vietnam’s fruit export turnover has been increasing steadily in the past few years from $827 million in 2012 to $1 billion in 2013 and $1.477 billion in 2014. 

Encouraged by the satisfactory growth rate, MOIT hopes the export turnover would be $2 billion this year. However, the goal is challenging. 

A lot of countries have opened their markets to Vietnamese fresh fruits. However, high transport fees have made Vietnamese fruits less competitive in price in comparison with other exporters.

A representative of Laba Da Lat, a banana exporter, noted that Vietnamese farmers have to look for markets and they do not receive any support from the State. Eighty percent of banana output is exported to China, but farmers cannot control the prices.

Meanwhile, Vietnam does not have clear policies on material area development. Nguyen Huu Chung, a businessman, related a story of failure incurred by a foreign invested enterprise due to the unreasonable programming on material area development.

In 1995, a British investor set up a factory to make concentrated fruit juice from pineapple in Long An province. 

The factory could run only one week when it ran out of pineapple materials for processing. The investor finally had to stop operation because it could not control the material sources. In order to make 100 kilos of concentrated fruit juice, the factory needed 1,000 tons of pineapples, but it could not find enough materials in Long An.

Kim Chi

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