Expand export markets for Vietnamese high quality agricultural produce

On April 16, the International Finance Corporation (IFC) and the Plant Protection Department under the Ministry of Agriculture and Rural Development have signed a memorandum of understanding (MoU) to support the Vietnamese Government’s efforts to expand export markets for its high quality agricultural produce.

Over the next four years, the member of the World Bank will work with the Department to boost exports of internationally recognized-quality dragon fruit and passion fruit. These are two among the largest and fastest-growing single fruit product categories with strong potential to access high-value markets.

Exports of Vietnamese fruits and vegetables have more than tripled in just five years to 2018, but the bulk of produce is still exported through informal channels and at less competitive prices due to inefficient standards. Vietnam's largest market is still China with more than 60% market share. Just a month after the outbreak of Covid-19, dragon fruit fell dramatically when China closed its border.

To help address this challenge, the two parties will work to enhance the legal framework and public services in opening new export markets. Efforts will also focus on improving the quality and safety of dragon fruit and passion fruit by updating and enforcing requirements for phytosanitary measures, traceability, quality and food safety standards in line with international practices and requirements of importing countries.

In partnership with the Ministry of Foreign Affairs and Trade of Australia, Government of Japan and Green Growth Fund of Korea of the World Bank Group, IFC will help launch an interactive online system on export-related requirements for dragon and passion fruits by 2022.

Quality infrastructure services will also be improved to ensure export product conformity to international standards. These services will cover standard development, testing and certification of fresh and processed dragon fruit and passion fruit to meet export market requirements.

“Access to new and diversified markets will not only help increase export revenue and expand production, it will also improve the resilience of Vietnamese agribusinesses towards decline in demand in selected markets due to crises, such as the current COVID-19 pandemic,” said Kyle Kelhofer, IFC Country Manager for Vietnam, Cambodia and Lao PDR.

“As tax is no longer a trade barrier with free trade agreements in place, meeting sanitary and phytosanitary requirements is now critical for Vietnamese agricultural products to enter export markets,” said Hoàng Trung, Director of the Plant Protection Department.

“This cooperation with IFC will help accelerate our continued efforts to unlock export potential and the success of this project will serve as a basis to scale up to other agricultural products,” Trung said.

“This will help protect jobs and livelihoods for millions of agribusiness workers and farmers, and help build a higher value-added, export-oriented and resilient agribusiness sector in Vietnam.”