dragon export to the u.s market
DESCRIPTION
Graduation ThesisTRANSCRIPT
Table of ContentsList of Figures.....................................................................................................................iv
INTRODUCTION...............................................................................................................1
CHAPTER 1: BASIC THEORY & NECESSITY OF PROMOTION ACTIVITIES IN
EXPORT OF DRAGON FRUIT FROM BINH THUAN TO THE U.S.............................4
1.1. Overview of Binh Thuan dragon fruit production and export activities................4
1.1.1. Dragon fruit fundamentals...............................................................................4
1.1.2. The development of dragon fruit in Binh Thuan.............................................8
1.2 . Potential opportunities and role of the U.S market to dragon fruit export activities of Binh Thuan Province..................................................................................16
1.3. The main influential factors to the exports activities of Binh Thuan dragon fruits to the U.S market............................................................................................................17
1.3.1. The macroeconomic factors..........................................................................17
1.3.2. The microeconomic factors...........................................................................20
1.4. The necessity of boosting Binh Thuan dragon fruit export to the U.S market... .25
1.4.1. Investigate the potential of dragon fruits production....................................25
1.4.2. Market diversification to reduce export risks................................................26
1.4.3. Export to the U.S boosting sustainable development of Binh Thuan dragon fruit production...........................................................................................................27
SUMMARY OF CHAPTER 1.......................................................................................28
CHAPTER 2: THE CURRENT SITUATION OF BINH THUAN DRAGON FRUIT
EXPORT ACTIVITIES TO THE UNITED STATES IN THE PERIOD 2008 – 2012....29
2.1. The current situation of Binh Thuan dragon fruit export activities to the U.S market in the period 2008 – 2012...................................................................................29
2.1.1. The area of production and standardized packaging coporation for export to USA 29
2.1.2. Export volume...............................................................................................30
2.1.3. Export value...................................................................................................32
i
2.2. Analysis of factors that affect exporting Binh Thuan dragon fruits to the US market.............................................................................................................................36
2.2.1. Macroeconomic factors.................................................................................36
2.2.2. Microeconomic factors..................................................................................44
2.3. Analysis of the real performance of Binh Thuan dragon fruit export activities to the U.S. market in the period 2008 - 2012.....................................................................59
2.3.1. Advantages and the initial results achieved...................................................59
2.3.2. Problems and challenges...............................................................................60
SUMMARY OF CHAPTER 2.......................................................................................63
CHAPTER 3: SOLUTIONS TO PROMOTE BINH THUAN DRAGON FRUIT
EXPORT TO THE U.S MARKET....................................................................................64
3.1. Foundations for solution......................................................................................64
3.1.1. Orientation of government and local development strategy/policies for the period 2013 - 2020......................................................................................................64
3.1.2. Prospects of Binh Thuan dragon fruit export to the U.S market in the period 2013 – 2020.................................................................................................................65
3.2. The solutions to boost the export of Binh Thuan dragon fruit to the U.S market67
3.2.1. Group of solutions to enhance the connections in the supply chain of Binh Thuan dragon fruit for the U.S market........................................................................67
3.2.2. Group of solutions to accelerate and improve production efficiency applying GAP standard to increase export supplying sources...................................................72
3.2.3. Group of solutions to diversify exports.........................................................77
3.2.4. Group of solutions to boost marketing and promotion of exports to the US market 80
3.3. Some general recommendations to the Government and the Ministries concerned with the aim to foster the export of Binh Thuan dragon fruit to the US market............82
SUMMARY OF CHAPTER 3.......................................................................................84
CONCLUSION..................................................................................................................85
REFERENCES..................................................................................................................86
APPENDICES...................................................................................................................89
ii
List of Tables
Table Page
1.1. Nutritional value of 100 grams of a dragon 6
1.2. Market breakdown of export value of Binh Thuan dragon fruit from 2005 to 2011
13
1.3. The cultivation area of dragon fruit and the number of standardized packaging
plants for export to USA in Binh Thuan from 2008 to 2012 29
1.4. Dragon fruit export prices in some markets in 2012 35
1.5. Import tariff for Binh Thuan dragon fruit to US market under HS code in the
period 2008 – 2012 41
1.6.
iii
List of Figures
Fi gure Page
1.1. The cultivation area of dragon fruit in Binh Thuan in the period 2005 - 2011 9
1.2. The output of Binh Thuan dragon fruit production in the period 2005 - 2011 30
2.1. Export volume of Binh Thuan dragon fruit to the United States in the period 2008
- 2012 33
2.2. Export turnover of Binh Thuan dragon fruit to the United States in the period 2008
- 2012 39
2.3. The export price of Binh Thuan dragon fruit in the U.S market in the period 2008 -
2012 49
2.4. Average ratings of the importance and the level of investment in export promotion
activities by on a scale 1 to 5 by Binh Thuan enterprises which have exported
dragon fruit to the U.S 50
2.5. The frequency of participation in trade fairs, specialized exhibitions in the U.S of
Binh Thuan enterprises exporting dragon fruit to the U.S 51
2.6. Export distribution channels to the U.S market of Binh Thuan dragon fruit 53
2.7. Evaluation of Binh Thuan enterprises exporting dragon fruit to the US about
cooperation and experience exchange with peers 48
2.8. Evaluation of Binh Thuan dragon fruit enterprises about the connection and
reciprocity in production and exporting 54
2.9. Volume of dragon fruits imported to the U.S in the period 2008 – 2012 56
2.10. Volume of dragon fruits imported to the U.S in the period 2008 – 2012 by market
share 58
3.1. Supply chain of Binh Thuan dragon fruit export to the US market
3.2. Export enterprise – Cooperative co-operation process 68
3.3. Export enterprise cooperation process 70
iv
INTRODUCTION
1. The significance of the topic
Dragon fruit continues to have the highest value of any Vietnamese fruit export. Dragon
fruit in recent years has achieved the highest export growth and export value among all
fruits cultivated in the country. Given preferential climate and soil condititions, Binh
Thuan province has many advantages in the production of the dragon fruit, known as the
"capital" of dragon fruit in Vietnam, contributing more than 70% of national production.
Export of dragon fruit brings significant foreign-earned income and other huge benefits
that change profoundly rural appearance of Binh Thuan over the past years. However,
Binh Thuan dragon fruit export still lacks a sustainable development strategy that fully
utilize all industry’s inherent potential. Especially in the past three years, the export
market of dragon fruit faced a regular situation of oversupply, the sudden price volatility,
which caused heavy losses to growers. The reason is that export Binh Thuan dragon fruit
is too dependent on the Chinese market with over 60% of output exported to this market
by unofficial cross-border route. Although Chinese market has a huge consumption and is
relatively easy, trade transactions in this market are much unstable and contain a lot of
underlying risks. In addition, the production of dragon fruit itself in Binh Thuan also
reveals many weaknesses as production is fragment and farmers are unaware of
sustainable development. Therefore, the choice of export markets to identify development
priorities and goals plays a very important role in driving the mode of production and
business practices in order to best meet the market needs and improve the quality of
industry.
The United States (the U.S) is the goal to boost export of many countries because the
market is of a huge scale with constantly increasing demand, especially for fruit and
vegetables. On the other hand, export to this market also help brings very high profits and
various other benefits for exporters. Although Binh Thuan dragon fruit was allowed to
export to the US market since 2008, the turnover still account for only 4% of total dragon
fruit export value. This is a tiny number compared to actual potential of the industry. This
suggests that the export of Binh Thuan dragon fruit is facing certain restrictions, derived
from subjective and objective reasons. Therefore, assessing the situation, thereby finding
the effective solutions to improve dragon fruit export operation in Binh Thuan is
essential. Aware of the significance of this, I have chosen the topic "BINH THUAN
DRAGON FRUIT EXPORT TO THE UNITED STATES" as the subject for my thesis.
2. Study objectives
- Analyze the potential and role of the US market in Binh Than export of dragon fruit
as well as micro/macroeconomic factors affecting the production of dragon fruit in
Binh Thuan and dragon fruit export activities to the U.S market
- Analyze and assess the current situation of Binh Thuan dragon fruit export to the U.S
in period 2008 - 2012 on the basis of combining theory with empirical research.
- Propose solutions to boost export of Binh Thuan dragon fruit to the U.S market in the
period 2012-2020 based on the orientations and objectives given.
3. Subjects of study
Production and export activities of Binh Thuan dragon fruit to the US market
4. Scope of study
Space limitation: Binh Thuan Province, the United States and other related areas
Time limitation: baseline study for the period 2008 - 2012 and solution proposals for the
period 2012 - 2020
5. Research methodology
Methods of data collection:
- Secondary data: actual survey of 50 exporters and 150 growers in Binh Thuan.
Enterprises surveyed are managed by Binh Thuan Dragon Fruit Association.
- Secondary data: collected from specialized reports, specialized textbook, research
papers and Internet resources.
Method of data processing: Microsoft Excel software applications
Method of data analysis: statistical, comparative and synthetic methods
6. Paper Structure
The contents of the thesis are presented in three chapters:
- Chapter 1 provides theoretical foundation and discuss the necessity to boost Binh
Thuan dragon fruit export to the U.S market
- Chapter 2 shed lights on the current situation of Binh Thuan dragon fruit export to
the U.S market in the period 2008-2012
- Chapter 3 proposes solutions to boost Binh Thuan dragon fruit export to the U.S
market in the period 2012-2020
Finally, I would like to thank my advisor, Mr. Vo Khac Thuong for guiding and
supporting me over the years. Your patience, encouragement, and immense knowledge
were key motivations throughout my success in conducting this thesis. You have set an
example of excellence as a researcher, mentor, instructor, and role model.
I also would like to thank my thesis committee members for all of their guidance through
this process; your discussion, ideas, and feedback have been absolutely invaluable.
I'd like to thank my fellow graduate students, research technicians, collaborators, and the
multitude of undergraduates who contributed to this research. I am very grateful to all of
you.
Due to limited preparation time, budget and professional capacity, my thesis was not able
to avoid shortcomings. I would love to hear your feedbacks for further improvement.
Student
Nguyen Thi Minh Thi
CHAPTER 1: BASIC THEORY & NECESSITY OF PROMOTION ACTIVITIES
IN EXPORT OF DRAGON FRUIT FROM BINH THUAN TO THE U.S
1.1. Overview of Binh Thuan dragon fruit production and export activities
1.1.1. Dragon fruit fundamentals
1.1.1.1. Origin of Dragon fruit
Dragon fruit is a plant grown mainly for fruit and is also the name of a part of cactus
family derived from the deserts of Mexico, Central and South America. Currently, the
plant is also grown in other countries in Southeast Asia such as Vietnam, Malaysia,
Thailand, Indonesia, China, and a number of other areas (J.Crane and C.Balerdi,
2004).
Some people assumed that dragon fruit was brought to Vietnam more than 100 years
ago by French from Nicaragua and Cambodia. Meanwhile, some believed that dragon
fruit was introduced into Vietnam from South America in 1870 as an ornamental plant
because of only blooming at night so it is also called as "Flower of the Moon" or
"Queen of Night ". Despite the existence in Vietnam for a long time, this kind of fruit
has been only grown for commercial purposes since 1990s, and in recent years, due to
the high economic value, the area of dragon fruit has constantly increased to meet the
domestic and export demand. Some provinces in Vietnam own some special
conditions to cultivate and develop dragon fruit, especially Binh Thuan, the country’s
largest dragon fruit cultivation area. Besides, Long An, Tien Giang ... are also
concentrating on using vegetative reproduction in Dragon fruit.
1.1.1.2. Dragon fruit varieties
Dragon fruit comes in three types, all with leathery, slightly leafy skin:
Hylocereus undatus (white-fleshed dragon fruit) has red-skinned fruit with white
flesh. This is the most commonly seen "dragon fruit".
Hylocereus costaricensis (red-fleshed dragon fruit, also known as Hylocereus
polyrhizus) has red-skinned fruit with red flesh.
Hylocereus megalanthus (yellow dragon fruit, also known as Selenicereus
megalanthus) has yellow-skinned fruit with white flesh.
Those kinds all have similar taste of flesh such as sweet fragrance, moderate sweetness
and low-calorie supply. Dragon fruit’s seeds are also the same as sesame’s, which are
mixed in flesh and indigested (J.Crane và C.Balerdi, 2004).
In Vietnam, only two kinds of dragon fruit are cultivated. The main is red-skinned fruit
with white flesh, with the most famous varieties derived from Binh Thuan & Rice Market
(Tien Giang province). Moreover, there is also one kind of red-skinned fruit with red
flesh LĐ1, crossbred between Colombian red flesh & Binh Thuan white flesh dragon
fruit by the Southern Fruit Research Institute (SOFRI). This variety features many
distinct advantages such as: beautiful red color, big size, higher sweetness & level of
vitamin C than traditional dragon fruit (red skin & white flesh). Therefore, LĐ1 dragon
fruit is always more favored by consumers with 3 – 4 time higher selling price than the
white flesh. For color of skin, at present, there is already a kind of green-skinned dragon
fruit with small amount to serve mainly export demand.
1.1.1.3. Ecological characteristics
Dragon fruit has very high tolerance to drought so it thrives in hot and dry climate. The
ideal environment for dragon fruit are mainly regions with high light intensity, long day
and average temperature at 25 - 300C. The plants are not usually too picky to soil. It grow
well on land which is flat, porous, well drained and has low level of acid with rate of pH
from 5.5 to 6.5 or salinized. Despite great drought tolerance, there is a need for sufficient
water supply to help this plant gain more flowers and fruits in big size, especially in
flowering and fruitioning periods. The demand of water for dragon fruit is about 800 –
2,000 mm/yr. If this rate exceeds, it will lead to flower fall and fruit rot issues (J.Crane và
C.Balerdi, 2004). In Vietnam, there are two havest seasons of dragon fruit, the first is
from April to September, second is from November to March (according to Lunar
Calendar). Flowering period often lasts to 25 days and then it is time for farmers to
harvest.
1.1.1.4. Benefits of dragon fruit
Dragon fruit is a nutritious kind of fruit, which offers a variety of vitamins and minerals
but low calories so it is becoming increasingly popular to health-concious consumers,
especially the Asian. According to research, 100 grams of a dragon fruit contain:
Table 1.1. Nutritional value of 100 grams of a dragon
Ingredients g/100gr of flesh Ingredients g/100gr of flesh
Water 85.3 Vitamin C 3.0
Protein 1.1 Niacin 2.8
Glucose 0.57 Vitamin A 0.011
Fructose 3.2 Calcium 10.2
Sorbitol 32.7 Iron 6.07
Carbohydrate 11.2 Magnesium 38.9
Fiber 1.34 Phosphor 27.5
Ash 0.56 Potassium 27.2
Calories (Kcal) 67.7 Sodium 2.9
(Source: Quality Assurance and Testing Center 3 (QUATEST 3))
In addition, according to Oriental medicine, dragon fruit has sweet, sour taste, as well as
the effects of reducing inner heat. The body of plant helps to improve, strengthen muscles
and detoxify. Flowers can treat the cough and additionally, gum in dragon fruit aslo
decreases level of cholesterol in foods and bile salts. Hence, patients suffering from
obesity and high cholesterol/blood pressure should use dragon fruit as treatment. This
plant is also suitable to ones get diabete & chronic (Dinh Cong Bay, 2011)
In addition to usual way of consumption with fresh fruit, farmers in Binh Thuan have
invented one method to make juice and wine from red-fleshed dragon fruit, which have a
really nice color and unique taste. This lays a steping stone and offer potiential to develop
more directions for dragon fruit consumption in the future.
1.1.1.5. Characteristics of Binh Thuan dragon fruit
In 21 November 2006, The Ministry of Science and Technology officially gives
permission to the name of origin of dragon fruit product manufactured in Binh Thuan.
From this milestone, Binh Thuan dragon fruit is 6th geographic instruction which is
approved as a national property and protected endlessly in Vietnam by Vietnamese
Government. This decision has recognized the quality of Binh Thuan dragon fruit which
meets the certain standars throughout registration of product’s features as follows:
Form of fruit: Dragon fruit is in round form, has thick peel, beautiful red color and
high gloss
Flesh of fruit: crispy, sweet and little sour, typically fragrant, seeds in small size
and few of number
(Binh Thuan Department of Science & Technology,
2006)
Comparision of two kinds of dragon fruit: Binh Thuan & Cho Gao (Tien Giang) can help
clearly find out unique features of Binh Thuan dragon fruit as follows:
- Both of Binh Thuan & Cho Gao’s blossom is dependant on seasons, from May to
October in Lunar Calendar, flower at the same time with 100% ratio of fruition.
- Compared to Binh Thuan dragin fruit, Cho Gao’s has thinner peel, bigger size and
different taste. Dragon fruit cultivators at Cho Gao let fruits climb on bamboos,
instead of using pillors to elavate, to make unique taste for Cho Gao dragon fruit.
- Generally, Binh Thuan dragon fruit has nice look and thick peel leading to
lengthen reservation time and offer great advantages in product’s delivery.
- In term of chemical standars, Binh Thuan dragin fruit contains high level of
Protein, variety of vitamins and minerals, including: Vitamin C, Calcium,
Phosphorus, Magnesium, Sodium, which is more than Cho Gao’s; however,
Glucose, Fructose, Carbonhydrate are in lower level. This fact meets current trend
of consumption as there are more and more consumers are in favorite with
products being rich in Vitamin & Protein, but less Calories (See Appendix).
- In term of price, Binh Thuan dargon fruit is purchased at higher price than Cho
Gao’s mainly due to nice form. Moreover, being well-known as the the best region
of both quality & quantity of product, Binh Thuan also gains very important
competitive advantage compared to other competitors on dragon fruit market
(Axis Research, 2005)
1.1.2. The development of dragon fruit in Binh Thuan
1.1.2.1. The area of production and output
a) The cultivation area
At present, Binh Thuan is the country’s largest dragon fruit cultivation area. Especially
there has been a tendency of a rapid increase in the dragon fruit production area in recent
years.
Figure 1.1. The cultivation area of dragon fruit in Binh Thuan
in the period 2005 - 2011
Unit: Hectare
2005 2006 2007 2008 2009 2010 20110
5000
10000
15000
20000
5,7997,009
8,99310,663
11,88613,404
18,616
(Source: The Branch of Binh Thuan Statistic Board)
In 2005, the total cultivated area reached 5799 hectares, which yielded nearly 97,000
tons. The years later, since 2005, the new acreage had increased over 1,000 hectares (only
in term of separate statistics of 38 members in Binh Thuan dragon fruit Association). In
2006, the area for growing this plant went up more than 7,000 hectares, reaching 222.4%,
far exceeding planning objectives. In 2008, the area under dragon fruit crops exceeded
the 2010 plan of local authority, reaching 10,663 hectares (instead 10,000 hectares as
planned). In 2011, especially, the acreage expanded remarkable, 5,000 hectares more than
2010. However, the actual planting area of Binh Thuan dragon fruit was much larger than
that reported, and the inability to control was admitted by authority due to farmers’ serial
spontaneous conversion in growing dragon fruit. (Annual report from Binh Thuan
Department of Commerce, 2013).
The following reasons accounted for remarkable increase in dragon fruit cultivation area
in recent years:
Firstly, domestic price as well as export price in the world’s market are stable and at the
high rate, output market are constantly being expanding. Secondly, the condition of
weather and diseases of rice as well as other crops are complicated and inconvenient.
Thirdly, dragon fruit is easy to grow and gains high economic value. (Bui Dang Hung,
2013)
It is a good signal that the production area is constantly expanding. The evidence showed
that this a profitable manufacturing industry that attracting a large number of farmers
taking part in the production. However, despite the rapid increase in area, this is a
rampant development without complying with the province’s guidance and planning. In
substance, the area embarked on the scale of households with small and dispersed size;
while the farmers still lacked the specialized knowledge as well as modern development
orientations in production. This becomes a burden to consumption, and hinders the
durable aim of development that is a strong boost in dragon fruit production towards
good production with huge quantity, high quality, and the guarantee of food hygiene and
safety in order to meet the domestic and foreign markets.
b) The output of production
The manufacture of dragon fruit needs the lowest level of investment in the exported
fruits as the plant gives fruits after only one year. In the reasonable condition of climate
and soil, dragon fruits cultivated in Binh Thuan annually produce high capacity and yield.
The supply of this product was not only enough for domestic consumption but also
exported to variety of countries.
Figure 1.2. The output of Binh Thuan dragon fruit production
in the period 2005 - 2011
Unit: kg, hectare
2005 2006 2007 2008 2009 2010 20110
100000
200000
300000
400000
500000
02000400060008000100001200014000160001800020000
Output Area
(Source: The Branch of Binh Thuan Statistic Board)
In recent years, the average productivity of dragon fruit was contantly being improved,
increasing only about 198 quintal/hectare in 2005 to 280 quintal/hectare in 2011. If
grown with the form of intensive farming and taken good care of, the productivity could
reach the higher than 300 quintal/hectare (Annual report from Binh Thuan Department of
Commerce, 2012).
The period of 2005 – 2011,the yield of dragon fruit went up remarkably. In 2011, the
output reached 400 thousand tons, 4 times reported in 2005. Moreover, the growth rate of
yield was higher than of the area during the period that shown the continuously increase
of quality of production due to the activeness of dragon fruits cooparatives and
associations in applying scientific and technical measures to production model so as to
maximize the yield per unit area. However, in recent years, the speed of scaling
expansion of market could not keep up with of output increase. In spite of the huge
number of output, there were not enough quantity of products to supply for the potential
markets – the US, Europe, Japan. It was because of lack of standard products for
exporting. In the past few years, the markets with significant scale had not been still
opened to Binh Thuan dragon fruits; for that reason, most of them, accounted for 65%,
were non-quota production to China. Like “putting all your eggs into a basket”, causing
the instability of consumer price of dragon fruit, and depending entirely on Chinese
traders. Theexistence of excess in this market caused serious crop prices fell in 2011 and
2012. Therefore, the development of dragon fruits towards sustainability, and promotion
of exportation to the market with high stability, like the US, became the vitality to
manufacture of dragon fruits in Binh Thuan.
1.1.2.2. Comsumption and Exportation
a) Comsumption
Dragon fruit is comsumed in form of fresh fruit by two ways: domestic consumption and
export. According to the suvey, domestic markets consumed about 15 – 20% of total
production and roughly 80 – 85% was exported. In which, the offcial export accounted
for proportion of about 15 – 20 %. The remaining (about 60 – 65%) was transported to
the northern border provinces for comsumption to serve cross-border purchases with
Chinese traders. (Annual report from Binh Thuan Department of Commerce, 2012)
b) Exportation
Dragon fruit is one of the main export commodities of Binh Thuan, and regarded as a
most valuable product with highest growth rate in export turn-over among Binh Thuan
agricultural commodities. Compared with the total of direct export turn-over, the official
export of dragon fruits accounted for approximately 13 – 15% of the proportion and made
up about 48 – 50% versus export value of other agricultural products. The consumption
and exportation of Binh Thuan dragon fruits, together with the development of
production, acquired outstanding achievements, particularly since 2005.
Table 1.2. Market breakdown of export value of Binh Thuan dragon fruit
from 2005 to 2011
Unit: 1.000 USD
Markets 2005 2006 2007 2008 2009 2010 2011
Hong Kong 3.238,50 4.890,08 3.955,02 2.577,90 673,20 133,8 298,8
Taiwan 3.777,50 3.997,34 3.892,78 3.685,31 452,60 - -
China 188,00 487,33 2.788,42 2.584,00 4.540,20 6.887,8 6.774,70
Singapore 1.110,40 1.780,03 1.682,25 1.647,19 2.570,70 1.940,9 1.288,2
Thailand 1.001,10 1.999,59 2.012,52 2.127,60 1.818,90 1.670,6 1.332,8
Malaysia 1.071,60 563,10 537,91 466,20 693,50 426,8 668,3
Indonesia - 54,16 999,30 1.900,70 1.951,10 4.453,4 5.152,6
UAE 0,20 9,03 - - 28,40 80,5 148,8
Canada - 54,98 268,40 78,80 - - -
Germany 62,50 20,80 12,60 286,40 - -
Netherland 47,20 892,96 1.013,80 2.684,70 2.496,20 3.027,8 2.244,4
France - 1,40 5,80 - 7,30 - 348,0
The UK - - - 26,00 - 654,1 726,0
The US - - - 169.9 249.1 951.1 969.7
Total 10.497 14.730 17.177 17.961 15.768 20.227 19.952
(Source: The Branch of Binh Thuan Statistic Board)
It can be seen in Table 2.1 that export turnover of dragon constantly increased over the
years, only experienced a sudden drop in 2009 due to the impact of the world economic
crisis. However, the turnover growth rate was not high. In the period from 2006 to 2011,
the average annual growth rate was only 5.2%. In 2010 – 2011, export value reached
approximately 19 million of dollar per year on average. In which, the export to Asian
countries accounted for about 15.6 million of dollar a year (the average proportion of
78.51%), Europe taking up about 3.5 million of dollar a year (the average proportion of
16.3%), and American was about 0.9 million of dollar (the average proportion of 4.9%).
Dragon fruits were exported by official route to 14 countries and parts of the world by the
businesses of Binh Thuan including Asia (Hong Kong, Taiwan, China, Indonesia,
Malaysia, Singapore, and Thailand,…), Europe (Netherland, United Kingdom, France,
and Germany), American (Canada, the US, and Chile in 2012 additionally).
Within the Asian market, China is the top of ones consuming Binh Thuan dragon fruit,
yet the quantity for exporting to this market only accounted for approximately 2 – 3%.
The primary reason is that boder trade is preferred by China, and the main form applied is
“definitive purchase” between Chinese and Vietnamese businesses. This way often brings
the huge risk, and the partners from Vietnam frequently bear most of the damage because
of the absolute dependence of businesses on the partners in purchase price and
consuming yield. The situation of price pressure occurs, causing the damage for
businesses and farmers. (Bui Dang Hung, 2013)
Markets in the US, Canada, Japan, and Europe are regarded as the potential ones as well
as sustainable development to Binh Thuan dragon fruits. The fruits exported to these
markets always achieve higher price than the others. In 2012, dragon fruits transported to
market of Russia and reached the highest average price ($4,500 per ton), followed by
Japan ($3,630 per ton), the US ($2,760 per ton), Canada ($2,160 per ton), and the UK
($2,100 per ton). However, these are the strict markets. The manufacturing has to meet
the international standards of planting, purchasing, packing, and storage. Thus, dragon
fruits of Binh Thuan are coping with difficulties in output when traditional Asian markets
were unstable and not facilitate to compete in hardest markets. To expand the steady
export markets, beside the standard of freshness, and safety, dragon fruits of Binh Thuan
should have specific strategies to meet the particular requirements of export markets.
1.1.2.3. The quality of product and certification
a) The quality of product
Actually, the quality of Binh Thuan dragon fruits is rather acceptable. According to local
authority, the quality of dragon fruits can reach 40% of the export one (deep interview
with traders). However, due to non-uniform quality of dragon fruits, and numerous
farmers lack experience in growing causing low quality and yield. On the other hand, the
fast crop growth makes the control of product quality without proper attention, and has
the big influence on the quality of dragon fruits (deep interview with traders).
b) Branding and labeling
As presented above, dragon fruits of Binh Thuan have become prosperity and exclusive
national brand in 2006 after registration of the protection of an appellation of origin, also
named as “geographical indications” following Intellectual Property Law of Vietnam
2005. In term of commerce, “geographical indications” is a sign to correspond to the
origin of a product, and is one of primary factors to certificate reputation of a product.
The reputation can be reached basing on the quality, and the characteristics of product, or
through advertisement, and trade promotion of manufacturers; is an invisible part but
increases the product value and plays a significant role in normal life, and commercial
activities. However, “geographical indications” of Binh Thuan dragon fruits granted was
valid in ASEAN. The past times, Binh Thuan Department of Science and Technology has
actively worked with domestic and foreign law firms to review urgently, and signed for
registration procedures of geographical indications for dragon fruits in large export
markets in the world such as Taiwan, Hong Kong, South Korea, China, the US, and some
parts in Europe in order to lose the brand like the situation of Buon Ma Thuot Coffee in
China. On October 24th, 2012, the US Patent and Trademark Office granted
trademark protection diploma in 10 years for dragon fruits of Binh Thuan. The
brand of Binh Thuan dragon fruits was protected exclusively across the US, and could be
extended after 10 years. Then, the brand includes the word of Binh Thuan (stylized blue
written), Dragon Fruit (red) and an image of dragon fruit (see Appendix). This thing not
only increased the value but also created the considerable advantage of competition for
Binh Thuan dragon fruits as this was the first exclusive brand of dragon fruits of Binh
Thuan in the US market. In the future, the local authority should have strict methods of
management to the usage of exclusive brand so as to ensure the reputation of the brand
“Dragon Fruits of Binh Thuan”.
1.2 . Potential opportunities and role of the U.S market to dragon fruit export
activities of Binh Thuan Province.
The United States of America is a republic constitutional nation including 50 states, areas
of 9,83 million km2 , population of more than 312 million of people in year 2010. It is a
nation of huge population standing at the third position in the world. The U.S is one of
the capital economy being stimulated by abundance of natural resources, well-developed
infrastructure and high productivity. The United States is considered as the biggest
economy in the world with GDP in year 2010 estimating at 14,7 thousands USD,
accounts about ¼ GDP worldwide. This is also a nation having GDP per capita very high,
standing at the position of 7 ranking in the world with 47.284USD/per citizen. The
country is also the largest importer of good and commodities and the third largest
exporter in the world (According to the IMF – International Monetary Fund).
Regarding exports activities of the province Binh Thuan, the U.S’s market is seen as a
place of highly potential opportunities and plays a crucial role in long-term strategic
development of Binh Thuan dragon fruit production.
First of all, the United States is a current the world’s largest importer of fruits and
vegetables with constantly increasing demand. Meanwhile, fruit imports comprise
approximately 40% in total demand of fruits consumed in the U.S with growing
percentage of tropical fruit in total import turnover. This reflects the awareness of the use
of organic and healthy products becoming more popular in the mindset of the American.
Population structure becoming older with increase in the number of American with some
roots of Asian also have some positive influences to the demand in this market when
these groups tend to consume more fruit and vegetables, especially tropical food. Dragon
fruit is actually a traditional product for Asian-rooted consumers in general and the
Vietnamese-rooted specifically in the U.S. As the Asian community are pretty large;
consumption of dragon fruit is also very high. As to other ethnic groups, they are still not
be familiar to dragon fruit, which is known only in the premium segment of the market.
However, the business analysts assure that market of dragon fruits will develop very fast
and strong in the next period of time. (Caitlin Moldway, 2012).
Secondly, the U.S has proposed many strict requirements to agricultural products,
especially the quality as well as iterative process from production, packaging, storage to
export. At the same time, the U.S also implements various supporting policies for
exporting nations to embrace advanced technology and effective & professional
management methods in order to reach these requirements. This is the main stimulus that
enforce the constant improvement and innovation in the production of Binh Thuan
dragon fruit in order to meet high standard of international market.
1.3. The main influential factors to the exports activities of Binh Thuan dragon
fruits to the U.S market.
1.3.1. The macroeconomic factors
1.3.1.1. About Binh Thuan Province
a) Natural conditions:
The nature elements include climate factors (temperature, rainfall…), water sources and
soil. Natural conditions are considered as the basement for the existence and development
of agricultural production as well as territorial differentiation, which create unique
characteristics and signature for agricultural products. In the oriented development of
modern agriculture and large-scale production, areas with preferential conditions on
nature will form the basis for developing specialized cultivation. Thus, the research steps
of natural condition before kick-start any production will accelerate the profound
understanding of unique features of dragon fruit as well as other important seasonal
influences to export supply to the U.S.
b) Labor resources
The labor conditions consists of two factors: quantity and quality of human resource. In
particular, The number of workers involved in the cultivation and the qualifications,
skills, skills and experience of farming workforce are critical to the production as well as
quality of dragon fruit exports through activities of manufacturing, trading, research and
application.
c) Infrastructure conditions
Infrastructure can be understood as the system of transportation, information system,
power and water supply, and systems of machine, factory, technology for production.
Modern infrastructure play an essential role to the development of the entire economy,
which systematically leads each component of economy to operate smoothly, saving time
and cost. Especially, the export activities of dragon fruit require a synchronous and
modern infrastructure to meet rigorous standards of demanding U.S market.
d) Government policies
Regulatory environment has a direct impact on the development of all sectors in the
economy. If it is developed well, the new economy might have more opportunities to
foster. The Government policy, an element which enforces many industries via
Government subsidies, but at the same time, it also create challenges to the activities of
this industry via tight management policies.
Via the production and marketing activities on market of dragon fruits specifically, as
well other agricultural products, the Government has published many positive supporting
policies to farmers and businesses. These policies are promulgated to many problems
relating to capital supports, investment attraction as well as business promotion of many
media to small scales corporations.
1.3.1.2. About the U.S’s market
a) Tariff on dragon fruits.
Imported taxes are kind of taxes which any country or area aims to put on imported
commodities. The taxing system of America is called as Harmonized Tariff Schedule –
HTS. This system is built based on the System of Modifying commodities and Codes of
Harmonization, which is invented by the Customs Cooperation Council. At the U.S
market, the tariff depends on types of commodities and their origins.
Harmonized Tariff Schedule – HTS of the U.S has different tariffs for 3 groups of
countries:
MFN tariffs, or called as the tariff level for NTR countries is applied for members of
WTO and other nations non-members of WTO but have signed the bilateral trade
agreements with the U.S, for example Vietnam. The MFN is written under column
“General” of column 1 in the U.S’s HTS .
Non-MFN applied for countries which are members of WTO and also have not signed
bilateral trade agreements with the U.S, is higher that that of MFN. The amount of non-
FMN is written under column 2 of the U.S’s HTS
NAFTA is applied for imported products from Canada and Mexico, where offer tax-free
or tax incidences lower than than MFN, written in column “Special” under column 1 in
HTS.
Generalized System of Preferences – GSP reflect some imported products from
developing counties are offered GSP, a free-tariff by the U.S (United States International
Trade Commission, 2013).
Việt Nam currently in the group of tax effect of MFN, and agricultural products. In these
kinds, dragon fruits belong to the group of this tax effect as well.
b) The challenges of non-tariff to dragon fruits
The U.S’s market set various tight policies for imported agricultural products, which aim
to protect plant health and country citizens. For this agricultural products of Vietnam in
general and the dragon fruits be specifically, when imported in the U.S, these products
mandatorily acquire the standards of APHIS from garden to process of packaging,
stamping and handling jobs before exporting and other policies about food safety of
FSMA. The fences of technologies are considered as the biggest challenges for the U.S’s
market and cause not just small concern for corporation exporting dragon fruits in the
process of preparing merchandises of products to qualify standards.
1.3.2. The microeconomic factors
1.3.2.1. About the dragon fruit growers
These are considered as essential elements in pipes of values for dragon fruits, the
farmers produce dragon fruits play an important roles, which decide the number of
producing drgon fruits as well as qualification to supply into the market. Especially, the
U.S’s market is very tight, in which to qualify this market, Vietnamese framers are
required to meet several of standards and offset high requirements. The influences of
dragon fruits farmers to the exporting activities into the U.S’s market is analyzed through
3 angles: size of operations, crossbred techniques, and methodologies of cultural farming,
harvest and protection.
a) The sizes of operation
The number of producing dragon fruits every year supply exporting activities depending
very high on sizes of operation. The activity of farmers produce scatter, considered
planting dragon fruits is a seasoning job, or concentrating on large sizes of operation,
guarantee on stable number of supply for the market influencing very high on buy-sell
activites of exporting companies as well as supporting tasks of the Government in
searching for stable purchasers for producers.
The decision in having a matching sizes of operation are influenced very high via the
philosophy of producers, as well as being partly influenced by other external factors such
as activities of buy-sell companies, the supporting policies on producing dragon fruits of
the Government …
b) The techniques of crossbreds and farming dragon fruits.
If the sizes of operation influence mainly on production of dragon fruits to supply the
demand of market, the elements in techniques of farming lead as a deciding factor in
qualify the qualifications of products, meet the demand and consumers insights. This
factor even influence on deciding sizes of operations.
Whist, each step in process of technologies require farmers to practice right and fully
manner, which aim to produce well-qualified and stable dragon fruits. Specifically, if
planting dragon fruits accordance to standards of VietGap, farmers need to guarantee 60
standards from the process of making grounds, choosing seeds, planting, taking care,
protecting and harvesting… as well to note details, careful in preparing the whole process
to access the sources as indeed. If not catching in every detail, farmers will easily face
failures, number of producing and qualifications need to be paid attentions.
However, if following the traditional process, farmers will only produce products having
different qualities, which do not meet the requirements of exporting. To protect the
qualities of dragon fruits, the techniques of farmers need to be skillful and firm as experts
to have accordance farming and keep on developing new seeds to meet the demand of
this market.
c) The methodologies of harvesting and protecting
In the process of production, the qualities of dragon fruits are influenced by technical
elements in farming (seeds, substrate created materials and methodologies of taking
care…). Besides, the process of preliminary treatment, protection of dragon are always
influenced by many elements which change the qualities and amounts, causes failure,
influence on income of farmers and as well, reduce qualities of dragon fruits. In addition,
the habits of harvesting by farmers in steps of collecting, delivering, protecting and
preliminary treatment cause big loss to dragon fruits. The level of loss in protection
depends on several of elements as primary qualities of agricultural products,
infrastructure, facilities and time for protection.
Therefore, harvesting and handling after harvesting have directly influence on quality of
dragon fruits, via these methods, dragon fruits indirectly influence on the activities of
producing dragon fruits to supply demand of consumption internal Vietnam and
exporting. Depending on goal of using after harvesting, farmers or buy-sell corporation
apply methodologies of protection, preliminary treatment to reduce the loss as well as
guarantee on quality of dragon fruits to sustain until short all corporations. Besides,
protection activities in sustain qualities of dragon fruits in planting is very difficult, the
task in maintaining the process of protection to meet standards, tight requirements in
exporting, especially the requirements of the U.S’s market, is more difficult.
1.3.2.2. About dragon fruit enterprises
Same as farmers who producing dragon fruits, exporting corporations play an important
role in pipes of value for dragon fruits of province Binh Thuan; however, there are basic
different in role of enforcing exporting activities dragon fruits to other importing markers
in the world. In the area of research, the element about corporation is understood via
quality of human resources, logistics and conditions of delivering vendors, activities
enforcing exporting dragon fruits and the co-operating between companies.
a) The activities enforce exporting
Enforcing exports is one of the kind enforcing the international trading together with
enforcing exports and investment. The term of enforcing exports is announced under
various angles, but in a traditional way, the overall meaning of enforcing exports is a paer
of enforcing trading, includes designed activities to increase exports on a country or a
corporation, which is reflected and strict linkage under size of a country or linkages
between companies.
The activity enforcing exports do not play a role as enforcing the economy – social of a
country but also reflect an important meaning to a corporation. Firstly, enforcing exports
orient and lead in searching markers and develop potential products to push up exports.
Secondly, enforcing exports is an effective tool in enforcing the selling activities through
borders, which create competitive position for corporation on worldwide market. Thirdly,
enforcing exports contribute the linkage corporations, the single activity together
participate exports development.
The activity of exports of corporation in business of dragon fruits reflect under these
listed situations:
- Build and develop the brand image of business;;
- Participate fair market, exhibit specialist majors internal country and the U.S;
- Use advertising and communicating tool.
b) Channels of distributed exports
Channels of distribution play an important role in bringing products to corporation to
consumers in imported countries. Catching up with situation, tight management channels
of distribution do not only help business to sell more products, but also become a base for
business to increase controlling abilities the whole values of products. Base on this, the
channel of distribution is divided into 2 direct channel of distribution and third party
channel of distribution.
- The direct channel of distribution: marketing straight forward to consumers finally. The
direct channel of distribution could be applied as: selling to each house, POP display,
telesales,…
- The channel of distribution via third party: the product delivered to consumers after
distributing via agencies, retailers, whole sellers,…
The importing market as the U.S with vegetables in Vietnam may be a complicated
channel of distribution, which require the business of exporting dragon fruits need to
carefully searching to have the best method of attraction. The decision on channel of
distribution will create good conditions for creating brand image for business to be
treated well in the market of the U.S.
c) The methodology of liquidation, logistics and conditions of delivering.
The methodology of liquidation, logistics and delivering conditions could have
influenced on price of exports and risks of liquidation. Therefore, it also influences on
competitive abilities of dragon fruits in the U.S’s market.
d) The connection of business.
The connection of business plays an important role in co-operating periods to create
united strength for each industry, each major as well as trusted brand image for products
lines to compete on worldwide market. However, linkage between businesses is
important in sustainable development not only for corporation but also the whole country.
The benefit that corporation will own when actively connect to other corporations in the
industry is listed as below:
- Reducing the expenses and utilize the profits;
- Enforce and make sure the sustainably development;
- Increase the competitive position;
- Reduce the possibilities of being excluded;
- Build corporation culture;…
However, if the business is not aware of the importance of linkage issues, sustain the
condition of business, just take care of the personal brand image and compete fairly to
other businesses in the same industry. It not, the ability of business facing failures when
facing strict competitive situation of other corporations worldwide as well as limitation in
expansion due to unmet to deliver request of foreign trading will be very high. On the
side of development, the exporting dragon fruits need to understand clearly this problem
because it does not only influence on corporation individually bit also limit on
development of the whole industry.
1.4. The necessity of boosting Binh Thuan dragon fruit export to the U.S market
1.4.1. Investigate the potential of dragon fruits production
The potential of planting dragon fruits in province Binh Thuan is judged as excessed,
favorable for the development of production and exports. The potential will be reflected
under these angles:
Firsly, benefit about natural environment. The condition of tropical climate connecting
with many characters about ground create many opportunities for farmers in Binh Thuan
to do farming dragon fruits whole year. Trees produce effective results, less pests and
unique taste.
Secondly, benefit about human resources. The activity of producing dragon fruits create
many working opportunities for farmers. Base on great benefit of economy on dragon
fruits, it brings tons of potential to attract labors, not only planting but also processing. In
addition, farmers in province Binh Thuan are judged as skillful experts in techniques of
farming dragon fruits. This is considered as greater than other farming of other farmers in
other countries in regional areas.
Thirdly, benefit from Government supports. The Government policies has encouraged
effectiveness of farmers in producing dragon fruits and other corporations of dragon
fruits exports, as well as create long-term opportunity for this industry in the future.
Fourthly, the unique benefit of commerce between the U.S and Vietnam. The opportunity
from trading commerce of Vietnam – the U.S and trend of consuming fruits of the U.S is
a potential basic for sustainable development for operation and exports of dragon fruits in
province Binh Thuan to this market.
Fifthly, Thanh Long dragon fruit is at distinct advantage as it currently dominates the
market of imported dragon fruit in the U.S and does not have many competitors. Making
good use of this advantage will help brand of Binh Thuan dragon fruit have a foothold in
the minds of American consumers, creating a strong competent position to compete with
exporters from other countries in the future.
The key issue for the export of dragon is to fully exploit these potential sources in order
to facilitate the development of this sector and bring long-term benefits for the economy
as a whole. Therefore, there is a need for proactive strategy and measures to enforce
dragon fruit export to U.S market and global market in general.
1.4.2. Market diversification to reduce export risks
Currently, over 65% of Binh Thuan dragon fruit output is exported to China through
unofficial cross-border route, which makes selling price depend too much on the
volatility of this market, as a result, has caused heavy loss for the industry in recent years.
Unofficial cross-border trade is entirely unfavorable against exporters which leave them
in passive position as they are unable to grasp thoroughly price information in the market.
Although China market’s consumption capacity is huge but is subject to considerable
fluctuation. In recent years, there have been many times the price escalated and then
dropped abruptly, which have made series of farmers suffer from serious losses.
According to Mr. Bui Dang Hung - Chairman of the Binh Thuan Dragon fruit
Association, the massive exports of dragon fruit to China has caused a sign of abundance
in this market and selling prices continues to fall. Dragon fruit export to this market is
expected to be inefficiency in the long run. Therefore, Binh Thuan dragon fruit exporters
is compelled to restructure export market in an reasonable way into a greater orientation
to prospective and stable market such as the United States. Dragon fruit is a traditional
food for Asian consumers in general and Vietnamese-rooted consumers in America. Due
to the Asian and Vietnamese community is relatively large, also a high demand for this
item. For other ethnic groups, the dragon is still relatively new and is known only in the
premium segment of the market. However, analysts said the US market for this fruit will
grow fast and strong in the near future.
1.4.3. Export to the U.S boosting sustainable development of Binh Thuan dragon
fruit production
The United States is a demanding market, which require exporters to apply the process
and production techniques according to international standards. The process of efforts to
promote export to the United States requires farmers, businesses to continually explore
and invest in modern manufacturing methods and improve the competitiveness in
international arena. In addition, the United States launching programs to support
agriculture in Binh Thuan also accelerates the transfer of technology, which is invaluable
for backward agricultural backward as Binh Thuan.
On the other hand, the United States itself is a huge market, which potentially guarantee a
long-term exploitation. The dragon fruit exports to the US market is also considered as
"passport" to stimulate exports to other high-end markets. The United States is a market
with great influence in the world. Therefore, Binh Thuan dragon fruit being credited by
consumers in the U.S market also means a confirmation of the applicability of safe
production processes up to international standards. Besides, with the existing
infrastructure as well as the experience gained after exporting dragon fruit in the US
market, the export of this product to fastidious markets such as Europe, Japan... will be
easier.
SUMMARY OF CHAPTER 1
In Chapter 1, the author summarized the situation of production and export of Binh
Thuan dragon fruit as well as the potential of the US market for the development of the
business, while analyzed the impact of general factors affecting directly and indirectly to
the cultivation of farmers and business operation of exporting enterprises in Binh Thuan.
From which, the author has highlighted the importance of enforcing exports of Binh
Thuan dragon fruit to the U.S market for the development of the whole industry in Binh
Thuan province. From the above factors, the author has created a solid theoretical basis as
prerequisite to study the status exporting Binh Thuan dragon fruit to the United States in
Chapter 2 and proposed related-solutions in chapter 3.
CHAPTER 2: THE CURRENT SITUATION OF BINH THUAN DRAGON FRUIT
EXPORT ACTIVITIES TO THE UNITED STATES IN THE PERIOD 2008 – 2012
2.1. The current situation of Binh Thuan dragon fruit export activities to the U.S
market in the period 2008 – 2012
2.1.1. The area of production and standardized packaging coporation for export to
USA
Table 2.1. The cultivation area of dragon fruit and the number of standardized
packaging plants for export to USA in Binh Thuan from 2008 to 2012
2008 2009 2010 2011 2012
Area of production (ha) 398.2 486.7 857.0 1,468.9 2,688.1
Percentage of area of
production certified by
Vietgap (%)
28.52 28,87 29.01
Packaging corporation 02 05 07 08 11
(Source: Data from Center for Dragon fruit Research and Development in Binh
Thuan)
Dragon fruit which is eligible for export to the United States must have originated from
the region whose "production unit code (PUC)" and packaged from the corporation
whose "packaging unit code (PHC)" provided by the United States. Therefore, the
number of packers and production area which are eligible for dragon fruit exports to USA
have a direct impact to the volume of dragon fruit export in this market. The area which
wants to own PUC has to achieve certification standards by VietGAP, while packer has
to meet its own strict standards (Appendix 7) by the Animal and Plant Health Inspection
Service United States (APHIS). They will be tested and certified directly by experts from
this organization. From 2008 to 2012, the qualified area of production and packers
increased rapidly, especially the area of production has increased by 61.19% per year
throughout the period.
In September, 2009, The Export Phytosanitary System level II authorized and certified
the codes for 398.2 ha in Binh Thuan province which were acceptable to export to the
United States and certified (code) for 02 enterprises in Binh Thuan for its technical
eligibility of dragon fruit packaging in the United States. By the end of 2010, two
numbers above increased to 857.0 ha and 07 enterprises. Thus, thanks to the granted area
, dragon fruit production exported to the US market can be more than 20,000 tons / year.
By the end of 2011, 109 numbers of code which represents for 1922.8 ha area of
production has been suitable for dragon fruit exports to the US market by USA and
Vietnam phytosanitary experts. Binh Thuan province was granted 74 PUC codes, in
parallel with 1468.9 hectares (77.95% compared to the whole country); Tien Giang: 12
PUC codes, area of 130.77 ha; Long An: 20 PUC code, area 280 ha; Tay Ninh: 01 PUC
code (10 ha); Dong Nai: 01 PUC code (13 ha) and Ba Ria - Vung Tau: 01 PUC code (20
ha). In addition, the USA experts also issued PHC code for 12 enterprises; in that Binh
Thuan province achieved 08 PHC codes; Ho Chi Minh City: 02 codes; Tien Giang: 01
code and Long An: 01 code.
2.1.2. Export volume
Figure 2.1. Export volume of Binh Thuan dragon fruit to the United States
in the period 2008 - 2012
Unit: ton
2008 2009 2010 2011 20120
100
200
300
400
37.5 40.7
316.0356.5
184.2
(Source: Binh Thuan Customs)
Over the period 2008 - 2012, since Binh Thuan dragon fruit import to the United States
was approved by Animal and Plant Health Inspection Service (APHIS) of the US
Department of Agriculture (USDA), the export volume to this market increased
significantly despite some fluctuation, the average growth rate for the period of 2008-
2012 reached 48.87%.
In 2008, Vietnam exported for the first time 3 shipments of dragon fruit to the US, in
which Binh Thuan contributed a shipment with a volume of 37.5 ton. While this figure
was rather modest compared to the volume of the dragon fruit exported to other markets
such as China, Thailand…, this was a pride of Binh Thuan farmers when this item was
able to achieve access to US market, one of the most biggest and discerning market in the
world and also being considered as secure and effective output solution for Binh Thuan
dragon fruit. However, the joy was existed long as export activities to this market was
halted from late 2008 to March 2009. The main cause was due to irradiation plant of the
company Son Son, the only qualified irradiation plant for export to the United States at
that time, being closed for repairs in December 2008. In 2009, the total export volume
had no significant change, at 40.7 ton.
If the volume of exports in 2008 - 2009 had not yet leaved an impression, the volume of
exports witnessed a remarkable growth in the next period of 2010 - 2011. The export
volume reached 316 ton in 2010 and 356.5 ton in 2011 respectively. The average growth
rate reached 344.6%. Export activities to the United States became vigorous in Binh
Thuan. High profits from exporting encouraged farmers feel excited to apply safety
farming program such as VietGAP and GlobalGAP. Export firms also actively invested
factories and equipment to ensure that postharvest technology was able to US export
criteria, while also boosted business partner search and export promotion activities
simultaneously. As discussed in 2.1.1, dragon fruit cultivation area and the number of
packaging plants in Binh Thuan have increased significantly in recent years, which acts
as a basis for the growth in export volume. This is a positive sign because the dragon fruit
exportto the US market has apparently spurred the development of Binh Thuan dragon
fruit manufacturing in both quantity and quality.
The enforcement of Law on Food Safety Modernization Act (FSMA), approved by
Obama báMany shipments of dragon fruit originated from Binh Thinh were kept at the
port by U.S customs due to excessive residues of crop protection chemicals, causing
significant losses for exporters (General Science Magazine, 2011). The volume of export
fell by 50.9% in 2012 compared to 2011, with only 184.2 ton. Export firm representatives
said that export shipments to the United States were often subjected to substantial amount
of capital accumulation due to very high irradiation charge, more than 1USD per kg,
along with long transit time. Therefore, being kept at a port only one day also made a lot
of businesses suffer a major loss. Most businesses in Binh Thuan had limited financial
capacity, which made them feel afraid and suspended exporting until the new law was
clearly understood and law enforcement was consistent and stable (Bui Dang Hung,
2013).
Overall, since the dragon fruit export to the United States began in late 2008, the export
volume increased constantly over the years, which proved that Binh Thuan dragon fruit
has occupied a place in the heart of consumers and have developed a solid step in this
market. However, it is undeniable that the volume of exports to the US market was still
not commensurate with the potential of Binh Thuan on this item. In 2011, the volume
amount was only about 0.19% of the Binh Thuan total production.
2.1.3. Export value
In regard to the period 2008 - 2012, influenced by export conditions and price volatility
in the U.S market, dragon fruit exports from Binh Thuan to the United States also
fluctuated but experienced an upward trend.
Figure 2.2. Export turnover of Binh Thuan dragon fruit to the United States
in the period 2008 - 2012
Unit: 1,000 USD
2008 2009 2010 2011 20120
200
400
600
800
1000
1200
169.9249.1
951.1 969.7
508.4
(Source: Binh Thuan Customs)
The fluctuation of turnover also have a similar trend to export volume in the period 2008
- 2012. In the first year of dragon fruit export to the United States, turnover was recorded
at 169.9 million. In 2009, although the volume just rose slightly, the export turnover
increased significantly by up to 46.6% compared to year 2008, reached 249.1 USD. The
market instability due to the economic crisis in 2008 led to a steep rise in average price of
agricultural commodities and especially the expenses of production services. Both these
factors resulted in a surge of dragon fruit export prices, making growth rate of export
value far greater than that of the volume. Year 2010 marked a forward leap in export
turnover with an increase of almost 4 times higher than in 2008. The export value was
316 million USD and reached the highest level over the period to 969.7 million in the
year 2011. From this point, the value of export dramatically reduced by nearly half in
2012. There were two main causes for this situation. In addition to legal issues led to the
decline in export volume as described in 2.1.2, the dragon fruit import price in the US
market also began to fall since the time of 2010, partly due to the recovery of the U.S
economy after the crisis and the emerging competition from suppliers in Thailand. The
result is that export value finally reached USD 508.4 million in 2012.
Overall, dragon export in the period 2008 - 2012 generated a stable foreign earned
income for the country, contributed to improvement of the living standard of numerous
farmers in Binh Thuan. The downward trend in export price lately may negatively affect
export turnover. So, in the next year, there should be measures to enhance
competitiveness and create a strong position for Binh Thuan dragon fruit in the US
market as well as in the world in order to enhance value for this item, bringing in greater
foreign-earned revenue from export.
2.1.4. Export price
Figure 2.3. The export price of Binh Thuan dragon fruit in the U.S market
in the period 2008 - 2012
Unit: USD/kg
2008 2009 2010 2011 20120
1
2
3
4
5
6
4.35
5.13
2.86 2.85 2.84
(Source: Binh Thuan customs)
Export price of dragon fruit usually varies depending on the type of item, value
of contract and export market as freight and handling costs account for the
significant proportion of the export price structure. In general, when exporting to
the US market, red dragon are priced higher (about 2-3 times) with less volatility
than white dragon fruit.
In both year 2008 and 2009, the export price of dragon fruit in the U.S market
was at a relatively high level, minimum from USD / kg. The main reason is due
to the export volume of dragon fruit to this market was still low (as described in
Section 2.1.2), the demand far exceeded the supply. Another one was freight
rates and some production costs dramatically increased on the impact of the crisis
in 2008. From 2010, corresponding to the growth in the export volume, the
export price tended to decrease and stabilized at 2.8 USD per kg. However, this
remained a relatively high price compared to that in other markets.
Table 2.2. Dragon fruit export prices in some markets in 2012
Unit: USD/ton
(Source: Compiled from the thematic surveys of the Binh Thuan Dragon Fruit
Association)
In 2012, dragon fruit export price in Russia was the highest at 4,500 USD per ton,
followed by Japan with 3,630 USD per ton. However, dragon fruit export to these two
markets were only on trial with very small volume. The U.S came in third with 2,760
USD per ton, while in China and Indonesia, the two markets made up the highest
proportion in the structure of export market, export prices were only 565 and 396 USD
per ton respectively. Although the selling price to the US market was high due to
expensive transportation and irradiation costs (accounted for over 50% of price value)
but the exporters in Binh Thuan said this price still brought much higher profit than
exports to the Chinese market. However, Binh Thuan exporters still need specific
strategies for reducing sales price as they could face huge competition from Thailand as
exports from this country are given priority to be shipped by air and granted transport
subsidy of 30%
2.2. Analysis of factors that affect exporting Binh Thuan dragon fruits to the US
market
Market Price
Russia 4,500
Japan 3,630
The US 2,760
Canada 2,160
The UK 2,100
Indonesia 565
China 396
2.2.1. Macroeconomic factors
2.2.1.1. From the perspective of Binh Thuan
a) Natural condions:
Table 2.1. Meteorological Statistics of 12 months in 2011 in Binh Thuan Province
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov T12
Year
2011
Temperature 25.4 25.0 26.6 27.1 28.4 27.6 26.8 27.3 27.0 27.2 27.2 25.9 26.8
No. of sunny
hours190 248 194 273 261 276 222 221 183 241 226 163 2698
Rainfall 17.4 - 8.9 4.6 245.4 181.3 221.8 140.5 236.7 95.7 92.5 17.4 1262.2
Humidity 75 77 75 78 82 83 88 85 86 84 81 77 81
(Source: Binh Dinh Statistical Year Book)
Binh Thuan is located in a tropical monsoon region, characteristic by dry sunny climate,
high temperature, with highest temperature in the country. With an average temperature
of 270C a years, all months in year temperature above 250C, average moisture stable at
75-85% (Statistical Yearbook of Binh Thuan, 2013). With all the above climatic
conditions, Binh Thuan is in the most ideal province for the cultivation of dragon fruit
tree. However, the climatic conditions of Binh Thuan has some disadvantages affecting
production dragon fruit exports to the US market as follows:
Dragon fruit is a long day photoperiodic plants. Length of days is key requirements for
the induction of the plants' flowers. Binh Thuan dragon fruits flowers usually blossom
from May to July - the length of a day these days (the number of hours of sunshine 261h,
276h, 222h respectively). From January to February next year, as day length reduce, the
farmers must provide light from electric lights to pull the length of a day to help the
flower blossom, which puts tremendous pressure on electricity demand during these
months . At the same time, price increases also affect the competiveness of dragon fruits
compare with other fruits.
Based on the table above, Binh Thuan climate has two distinct rainy conditions, rainy
season (May to October) and dry season (November to April) with the northeast
monsoon. In the dry season, rainfall level is very low (less than 20mm) which cause the
shortage of water for the dragon tree, as the farmer has to use fresh water which is much
higher in price, as a consequence dragon fruits harvest should be fewer and smaller.
However, during the rainy season, due to the long heavy rainfall, high temperatures
combined with high humidity facilitate fungi and insect development. Among them,
natural pigmentation diseases and cracked shells are the most frequent, which make the
dragon fruit although still very good inside but the outside is ugly, with many flaws and
under the export conditions to the United States.
b) Working conditions
As a populous province, Binh Thuan's young population structure contributes to an
abundant labor force participation in the economic activities. In 2011, Binh Thuan has
627,971 people of labor age, of which more than 50% is engaged in agriculture
(Statistical Yearbook of Binh Thuan, 2013). This ratio is forecasted to go downward in
the future, but still maintain a significant level in the economy.
The cultivation of dragon fruits in Binh Thuan every year adding a large number of labor
involved. According to statistics, in 2011 in Binh Thuan, there are about 25,000 farmers
cultivate and trade this type of fruit. This number tends to increase rapidly in recent years
due to very high profitability.
However, despite the abundant of human resources, the inputs supply for exporting
dragon fruits to US market is not yet effective as the majority of the labor force although
have experience in cultivating dragon fruits but are not yet equipped well with the
expertise and modern manufacturing techniques to meet the rigorous export standards. In
addition, workers also lack awareness of the importance of commodity production,
sustainable production and lack of professional manners in manufacturing and trading. A
clear proof is in the process of producing dragon fruits under VietGAP standard, a large
proportion on farmers are illiterate, which cause difficulties in acquiring VietGAP
documents. It is very common that farmers still make decision by experience,
maintaining old habits production, not strictly adhere to the requirements of the program,
such as not wearing protective gears, not disposing trash at the right place or no paper
record to ensure traceability of the product ... (Dao Thi Kim Dung, 2013). These affect
the stable and unified quality of exporting dragon fruits, one of the main causes leading to
the fact that exporting is not commensurate with the potential of the province.
Moreover, dragon fruit mass cultivation is only developed within 10 years so the
province is in lack of expert in manufacturing and trading commodities. In recent times, a
series of programs to support farmers dragon as "Supporting farmers cultivating dragon
fruits to approach US Market program" activated by US Agency Of International
Development (USAID ), "The dragon fruit export expansion for farmers through good
agricultural practices" of the Southern Orchard Institute, "Researching the value chain of
Binh Thuan dragon fruits" had initially changed the production practices of the old
farmers, gradually moving towards the production of clean and safe dragon fruits while
providing strategic insights to help local officials offer effective solutions to development
dragon fruit industry in the future. All these programs are currently creating very positive
resutls, improving the effectiveness of dragon fruit cultivation.
c) Infrastructure
Electricity power and water system are of utmost importance to the cultivation of dragon
fruits. During puck from January 10 to February next year, due to the short day length, all
dragon garden needs a large amount of power supply to practice lighting techniques to
stimulate the flowering of the plants. The packaging facilities, trading dragon fruit also
need a stable power supply to maintain their operations. Thanks to the 500 kV
transmission line system nationwide and three local power supply including: power plant
Da Nhim through 110 KV transmission lines, power plant Ham Thuan - Da Mi through
110 KV transmission lines and power stations 3,800 kilowatt diesel, the demand for
energy in the cultivation of dragon fruits is fully met. However, as the cultivation area of
the dragon fruit is expansing very repidly, the power supply still not keeps pace with the
area expansion. In some remote locations, to establish and maintain the power networks
is very difficult. About water system, the Phan Thiet water plant with a capacity of
25,000 m3/day is currently upgrading and expanding the system using ADB funds, in
addition, the lake and pier systems being constructed will ensure meeting the demand and
cultivation activities. However, as discussed in natural conditions, water quality is an
issue that will require more attention in the future. The fact that farmers using many
drugs and chemical pesticide in agriculture caused natural water resources in many areas
of Binh Thuan contaminated, which lead to unguaranteed dragon fruit quality although
the farmers had adhered to strict regulations on the use of stimulants and plant protection
during cultivation.
For transportation and communication, Binh Thuan by geographic location is very
conveniently located near the major economic centers of the country including Ho Chi
Minh City in the north and Da Nang in the south, which play an important part in the
continuous investment of road and communication system in recent times. All districts
including mountainous districts have asphalt system connected to the main road, which
facilitate smooth economic activities.
An another factor in infrastructure affects exporting dragon fruit is the post-harvest
mechanical systems and processing factories. Binh Thuan now has 11 packaging factories
meeting US standards. In recent years, there has not yet the overload situation since the
export to US is still at low level, however the number of 11 factories is still too small to
meet the province demand. In the future there should be policies to encourage and
support the development of capital for packaging system to ensure high quality export
volumes not only to the United States but also other high-end markets such as Asia
Europe, Japan. Not only the primary processing stage but the irradiation stage also plays
a very important role in exporting to the United States. In 2008 - 2009, as only Son Son
factory in Ho Chi Minh City was licensed to export dragon fruit, this caused overload and
delays in the export of many companies. At the end of 2009, the An Phu factory in Binh
Duong was licensed so the situation was eased down but local companies are still at very
passive position as well as bearing high irradiation fee, which has limited the volume of
dragon fruits eligible for export to the United States (Binh Thuan Post, 2011). The
province's People Committees has recently approved the plan to build a irradiation plant
to serve dragon fruit export to this market.
d) Government Policies
In recent years, the national government, local governments have had many orientation
policies which affect positively the dragon fruit export to US market. Typically, the
policy development and expansion of the cultivation area of dragon fruit, financial
support for farmers and enterprises producing and trading dragon fruit... Besides, with the
United States as potential export markets and stable, Binh Thuan Department of
Agriculture was associated with The US Agency of International Development (USAID)
to guide farmers approach the US has brought positive results.
The Government has also directed the Southern Orchard Research Institute to develope
high quality dragon fruut seeds to meet the requirements of the export market. Binh
Thuan Department of Agriculture, or the Dragon Fruit Development Center is responsible
for orientating, training farmers and enterprises to practice cultivaing dragon fruits under
GAP standards. In addition, the Department also has a team of technical experts
participating in caring and curing plants, guiding farmers in using fertilizers and
pesticides safely, ensuring dragon fruit export quality.
The Government also implemented several programs aimed at the promotion of the
dragon fruit to the world including US market. Department of Trade and Tourism in Binh
Thuan is responsible for local companies participation in fairs and exhibitions in order to
introduce and advertise Binh Thuan dragon fruit. Especially in October 2011, The Centre
of Trade Promotion Council in Binh Thuan has an appraisal program promoting national
trade scheme promoting dragon fruit in US market. Until now, all these policies have
contributed positively to the conquer US market of Binh Thuan.
2.2.1.2. The US market
a) Import tariffs on dragon fruit
Currently, as the proportion of dragon fruit import compare with total imports of US
fresh fruit is very small, dragon fruit has no separate HS code of the Harmonized Tariff
Schedule of the United States (Harmonized Tariff Schedule of the United States).
Therefore, dragon fruits imported into the United States are being applied the code HS
0810.90.45 for "other fresh fruits", specific import tariffs are defined as follows:
Table 2.3. Import tariff for Binh Thuan dragon fruit to US market under HS code
in the period 2008 - 2012
HS code Portfolio Unit MFN tax GSP tax
0810.90.45 Other fresh fruits kg 2.2% 0%
(Source: Harmonized Tariff Schedule of the United States, United States Department of
Commerce website)
Due to the effect of Vietnam Bilateral Trade Agreement - US, merchandises export to US
market will be applied the Most Favored Nation (MFN) incentive, under which tariffs on
export from Vietnam to the United States only about 0-5%, when the normal rate is up to
20-40% (Institute of development Studies City. Ho Chi Minh City, 2007). Thus, Binh
Thuan dragon fruit being imported into the United States are entitled to preferential tax
rate (MFN) for members of the World Trade Organization (WTO) and other countries
that have signed trade agreements bilaterally with the United States, at the rate of 2.2%.
Although this tariff rate is not high, but other countries allowed to export dragon fruit to
US markets including Mexico, Colombia, Thailand, Nicaragua are entitled to GSP
preferential tariffs (GSP system for the developing countries - Vietnam is not entitled to
this tax in the United States), which makes the cost of export of Binh Thuan dragon fruit
in particular and Vietnam in general relatively higher compared to other competitors.
This will be a major obstacle in the future, the fact that the dragon fruit is a high value
merchandise in the United States will make all countries increase exports, which will
make Binh Thuan loss gradually its competitive position, especially when the United
States is considered to be very sensitive to market prices.
b) The non-tariff barriers to dragon fruit export
The United States is one of the countries with strictest import regulations on food and
agricultural products. To prevent the spread of pests and exotic diseases to the country's
agriculture and enhancing safety, food hygiene, the US Government has promulgated
regulations that strictly controlled in all stages from cultivation to import of any
agricultural product. Any fruit and vegetable suppliers of 3rd country (farmers,
processors, exporters) want to export vegetables to the US market have to meet the
individual requirements of each type of fruit and vegetables by United States Department
of Agriculture (USDA) and the US Department of Animal and Plant Health Inspection
Service (APHIS) directly adjust. Dragon fruit import into the US market must be in clean
production areas, in addition, all shipments must undergo irradiation stitched before
export and dragon fruits must be packaged appropriately.
About the cultivation areas, the dragon fruit must have origin from the clean production
certification at least from VietGAP, then the farm needs to register with the National
Plant Protection (NPPO) to be issued "production unit code" (PUC). The inspection and
VietGAP certification is undertaken by the Dragon Fruit Research and Development
Center of Binh Thuan.
Currently, the GAP standards are applied throughout the world as the commitment of the
farmers of a safe product, beneficial to human health and the environment. It is also
mandatory standards when exporting dragon fruits to the demanding markets like the US,
EU, Japan ... However, due to the low awareness of farmers on GAP and the cost to
implement GAP is 100-120 VND million higher for 1 hectar, the area of GAP dragon
fruit is still low, leading to qualified dragon fruit exports to the United States is not high.
About the packaging and labeling, dragon fruits must be packed in the package houses
certified by the experts of the Organization of American Plant Protection (NPPO) direct
survey, certification and issuance of "packaging unit code" (PHC). The standards include
provisions detailed documentation, sanitation packers, packing, processing, labeling,
transporting to disposal facilities irradiation (see Appendix).
About irradiation, because the United States has a subtropical climate area that is similar
to that of Vietnam (Florida, California ...) which can facilitate the proliferation of pest
remains on tropical fruits imports, so from August 2008, APHIS has allowed dragon fruit
Vietnam imported to the United States under the terms that dragon fruits are irradiated in
the exporting country. Irradiation technology is the use of ionizing radiation energy to
process food to enhance the quality, hygiene and food safety, destroying or sterilizing
bacteria, microorganisms, or other pests. All dragon fruit shipments must cross stitch
irradiation before irradiation with a minimum absorbed dose of 400 gray. Currently, there
are only two businesses eligible for the United States trustee certification irradiation
quarantine for the dragon fruit from Vietnam, which are Son Son Joint Stock Company
and An Phu Irradiation Joint Stock Company (Economic Times Vietnam, 2009). On
August 20th 2012, dragon fruit from Vietnam was allowed to directly export to the
United States for irradiation and quarantine procedures in this country. This license from
US has never had a precedent for any kind of vegetables from Vietnam, and there are
only 5 other types fruits of Asia (three from Thailand and two from India) are licensed,
which has proven the reputation and the credibility of Vietnam dragon fruit in general
and Binh Thuan dragon fruit in general. "Dragon fruit are containing dozens of types of
pests, including many common pests in Vietnam but do not exist in America, which
cause very strict examination. The fact that the US has allowed Vietnam dragon fruits to
go straight into their country for irradiation proves the high credibility of Vietnam dragon
fruits within the US on the issue of pest control and FSH. This is also an opportunity to
promote and expand the market for dragon fruit of Vietnam, since the US import
condition expansion meant that many other countries will also follow", said Nguyen Huu
Dat, Director of the Centre for quarantine plant post-importing II.
About the import procedures, in addition to the essential documents in the import files,
dragon fruits when exporting to the US market also need the Quarantine Certification
issued by the Ministry of Health of origin country (Animal and Plant Health Inspection
Service - USDA, 2013).
In general, technical barriers are the main causes leading to the low level of dragon fruit
exporting to the United States in the past periods. There should be a coordinated
investment in human resources, production techniques and infrastructure towards
modernization to improve the ability and meet the export standards of the United States
and other countries around the world. In addition, as the United States applying the new
farm regulation to modernize the Law on Food Safety USA (FSMA) also make the
regulatory environment not stable in the future, which is a major challenge for exporting
dragon fruit companies in Binh Thuan.
2.2.2. Microeconomic factors
2.2.2.1. From cultivation perspectives
a) Production scale
Dragon fruit is the long-standing kind of fruit in Binh Thuan but only sold commercially
for about 10 years. Especially, in the past 5 years, since dragon fruit was exported to big
market, dragon fruit has become high-class export fruit with high economic efficiency
and has drawn more attention from farmers as well as the investment and development of
the province. Currently, some farmers have invested in growing dragon fruit in private
farms, there are 20 farms larger than 10 ha all over the province. Besides, there are also
high-tech dragon fruit farms specializing in exports established under the provincial
capital such as dragon fruit GlobalGAP Hàm Minh co-operative, HTX thanh long hữu cơ
Phú Hội, HTX thanh long Hàm Mỹ…;model of associated production group Vietgap is
also formed and developed. However, most of farmers still grow dragon fruit with small
scale. According to the author’s survey, 90 percent of farmers owns production area of
less than 1 ha. This can be explained by 2 main reasons: first, high-economic profit of
dragon fruit led to the spontaneous cultivation but not appropriate investment in scale and
sustainable development; second, the characteristics of dragon fruit requiring much
manual labor in the process of caring; the cultivation cost which is increased by scale; in
addition, investment under the form of farms requiring huge capital with intensive
cultivation and management knowledge make the farmers hesitate to expand production
scale.
In general, dragon fruits’ cultivation brings higher economic efficiency and contributes to
eradicate poverty as well as changes people’s perception from small-scale and self-
sufficiency to large-scale and focused production. As a result, farmers have been
investing properly to increase productivity. However, the achievements mentioned above
are just a few examples. Despite the fact that farmers have somehow understood the
importance of growing dragon fruits, they still limit themselves to making ends meet for
their family, small-scale and fragmented development, limited awareness about the need
to integrate with other farmers in the region, which limits the ability to develop a stable,
sustainable dragon fruits’ cultivation. This has contributed to the unstable supply of
exported mushrooms, which limits the growth of exports to the world mushroom markets
in general and in particular the US market.
b) Breeding and cultivation techniques
Types: Dragon fruits primarily grown in Binh Thuan have red skin, white flesh
(accounting for 70% of the survey) with more unique characteristics compared to dragon
fruits grown in other Western provinces according to their sweet and sour flavour and
crispy flesh; And the red skin - red flesh type (accounting for 30% of the survey) is less
grown in the area but brings higher economic efficiency compared to the white flesh
type. This type is called Long Dinh 1 - LD1 which is produced by the Institute of
Southern Fruit by cross-breeding Binh Thuan dragon fruits and dragon fruits imported
from Colombia. They have several outstanding advantages such as as beautiful color and
higher nutritional values compared to the usual white flesh. Nevertheless, there are some
drawbacks such as being soft and being mushy when exposing to high radiation as well
as being more easily perishable and more difficult to preserve. Although the US market
seems to prefer the red flesh type, these disadvantages significantly restrict the amount of
red flesh dragon fruits exported. The Institute for Southern Fruit Research has recently
implemented research on red skin – purple flesh type Long Dinh 5 - LD5, while farmers
in the province have also produced a green skin - white flesh type to serve consumers’
need. There are more than 10 types of Dragon fruits in the world today with 3 skin colors
and 7 flesh colors, which attracts customers. In the future, research should be
strengthened in order to improve the current type of dragon fruits as well as create new
types to enrich their diversity for exports.
c) Cultivation techniques
Due to the active support and collaboration of the Binh Thuan Research and
Development Center for dragon fruit (Binh Thuan Department of Agriculture and Rural
Development) in the framework of the dragon plant tissue Figure VietGap, many farmers
have been changing perceptions day by day, recently, the number of farmers registered
and qualified VietGAP production increased rapidly (see Appendix). This makes dragon
fruit meet the standards of exporting also increased significantly. However, the extension
work faces a lot of challenges in public relation because of unstable famers’ psychology.
The VietGAP standard production requires a formal process, capital for the construction
of warehouses, tools, irrigation systems as well as to comply with more complex criteria,
such as strict records origin, selection of fertilizers…, whereas the benefits of GAP
planting GAP is not clear, only a small amount of VietGAP dragon garden is eligible for
exporting to some difficult market, the rest had to be exported to China for artificially
depressed as non-GAP dragon garden. Due to unstable psychology, farmers often feel
discouraged and go back to the old form of cultivation (interviews). In addition, the
application is not strictly required technical studies by improper or experience learned
from the successful model is also a cause of such failure (Dao Thi Kim Dung, 2013 ).
On the other hand, VietGap standards have some very clear criterias but the management
is still weak. There is up to 81% of surveyed farmers using GA3 to stimulate growth of
dragon fruit with twice per month of spraying before budding, 100% of farmers increase
duration of spraying up to once a week after budding. At some point of view, growth
stimulants is just a tonic for plant in the process of strong growth. However, the duration
of spraying is too thick make us have to think carefully. Within 100% of surveyed
samples, farmers admitted that they sprayed chemical pesticides directly onto the
branches and fruits to prevent some common diseases. More particularly, with feature of
taking nine to nine, proper care techniques may keep the shape of dragon on the tree to 3
months. They use paper to wrap dragon fruit and spray stimulants once a week to make
sure not cracked or changing color. However, farmers hardly noticed between the last
time of spraying to the harvest time when surveyed (according to standards VietGAP
must be from 7-10 days). Chasing standards of private enterprises about appearance of
dragon fruit and experience "left hanging" prolong the harvest when low prices made
farmer over abuse proper growth and plant protection products. In 2012, some shipments
of Binh Thuan dragon fruit exporting to the United States was hold at the port due to
residues of plant protection products under the FSMA. In the future, the issue of safety
inspections of food hygiene will be a big challenge for Vietnam dragon, but mostly Binh
Thuan dragon fruit.
d) How to harvest and preserve
Harvest: Harvest time is usually early in the morning (95% sample) or late afternoon
(5%), not harvested in the midday or evening. 100% of surveyed farmers use plastic
baskets with trolley to harvest dragon, compared with bamboo basket, using plastic
basket will reduce the incidence of friction during harvest. Process is entirely handmade.
However, the employee was hired with poor workmanship, lacking technical knowledge
in harvesting, often causes scratches, cracked shells ... reduces the commercial value. In
addition, farmers often do not pay attention to hygiene plastic basket and harvesting tools
within harvesting in the evening for overnight farmers (37% of sample) facilitate for
pathogenic microorganisms dragon grows very rapidly, causing little damage. Chemical
processing, and preservation of fungal diseases was conducted by purchasers Price will
be up to classification and weight of dragon fruit, farmers and purchaser are usually
classified based on ISO 7503: 2005, by common sense. According to TCVN 7503:
2005, dragon fruit is classified into three classes: "special" class 1 and class 2 (see
Appendix). Only “special” with perfect look is selected to export to US market.
Preliminary processing technology and preservation: Preliminary processing and
preservation is now being conducted by purchasing firm. Dragon fruit will be transferred
to packing factory just after harvesting. Currently, there are 11 factories meeting the
standards of exporting to US market. (see Section 2.1). In addition, these factories must
comply with extremely strict criteria under a closing processing from storage to wash
troughs, cool room, sterilization by ozone, packing, labeling… and regular inspected by
experts from United States. Typically, the processing system and packing after harvesting
of Queen Co., dragon fruit is processed through this system may be stored 40-42 days,
reduces the number of labor, and extremly hygiene and food safety. In the final stage,
dragon fruit is packed, processed and cryopreserved irradiated for exporting to the United
States.
Thus, planting dragon fruit in Binh Thuan, loss only occurs mainly in the harvesting stage
due to low technology in harvesting, in addition relatively strict requirements from the
US market, the ratio of dragon fruit meeting the standards is very low. The main
limitations contribute to the development status is not balanced with the potential of
export activities in Binh Thuan.
2.2.2.2. From cultivation perspectives
a) Export investment:
According to a survey of 48 businesses in Binh Thuan, there are 2/3 of total businesses
recognized the importantce of exporting activities; however, proper investment in this
field is scarce. In fact, 16 dragon fruit export businesses to US considered brand
reinforcement and development, specialty exhibition, fair participation and online
marketing tools as “very important(5)” and “important(4)”, but only 40% of business
have a considerable focus and investment.
Figure 2.4. Average ratings of the importance and the level of investment in export
promotion activities by on a scale 1 to 5 by Binh Thuan enterprises exporting
dragon fruit to the U.S
Using online advertising tools and methods
Attending internation fair trades and exhibitions of dragon fruit in Vietnam
Attending specialized fair trades and exhibitions in the U.S
Brand building and development
0 1 2 3 4 5 6
2.91
4.09
3.45
4.45
3.82
4.27
4.64
5
Lever of importance Level of investment
Dragon fruit export companies considered brand development was one of the most
critical factor and therefore received the strong investment. In fact, 5/11 (45.45%)
companies admitted that they had substantial focus on brand promotion activities such as
package design, trademark, marketing… Especially, since dragon fruit was exported
unprocessed, it was important to build a national brand name for dragon fruit of Binh
Thuan. Hence, exporting products will be easier to accept in the importing country.
However, just 18/48 (37.5%) deeply recognized that, others have not searched for
information and underestimated country band name. So, the awareness of develop a
country brand name for Binh Thuan DF is very low lead to a gap between dragon fruit
companies in Binh Thuan.
Specialized fair and exhibition about dragon fruit exports, which are organized in
Vietnam is more preferable than in the US for Vietnamese exporters. In fact, many
dragon fruit export businesses joined international events such as Mekong Delta
Vegetable exhibition and commercial Fair Trade in Vietnam annually. More specifically,
there is only 3/11 business joined the exhibition in the US with the frequency is 2 times a
year and 5/11 business admitted that they have never come to these exhibitions.
Figure 2.5. The frequency of participation in trade fairs, specialized exhibitions in
the U.S of Binh Thuan enterprises exporting dragon fruit to the U.S
27%
9%
18%
46%2-4 times a yearonce a yearless than once a yearnot yet
(Source: Survey by the author)
An absent of Vietnamese businesses in an international exhibition in the US may lead to
many advantages, for example, overlooks the potential customers, unclear about the
market trend as well as the mode of operation in the US. Although, these businesses
recognized the important of joining the exhibition, they encountered with some
difficulties such as:
Firstly, the cost of event participation is very high, which is 100 million per time.
Therefore, many businesses relied on loyal customers and have no courage to find new
customers and explored the demand of customer in the US.
Secondly, the information about these exhibition as well as low quality of a plan for these
events resulted in the efficiency was not as expected. Moreover, there is no official
organization to gather information, support and manage the event participation pluses the
lack of information sharing between businesses lead to a low efficiency.
b) Export division vision:
Based on the survey, 45.45% DF exporting businesses have exported through
wholesalers, 54.54% through US importers. These are intermediaries.
Figure 2.6. Export distribution channels to the U.S market of Binh Thuan dragon
fruit
Unit: %
Through export agents
54.55%
Through im-porters in the
U.S45.45%
(Source: Survey by the author)
The advantages of exporting through intermediary are low cost and simple. The main
reason that exporting business chose to go through intermediaries is that they are lack of
the market information and division system in the US. In the situation that DF exports of
Binh Thuan is a emerge business, exporting through intermediaries will give some
benefits such as simple, efficiency and lower risk. However, this exporting method will
influence the ability of catching up market demand and limiting the competitive strength.
In addition, developing their own brand name will be harmed because of relying on these
intermediaries. Finally, these intermediaries are not supposed to export products for one
company, they will stop and switch to another if there is higher payment company, which
lead to a very difficult situation for companies.
c) Delivery transportation:
Marine transportation is the main delivery tool of DF exporters. Delivery by airplane is
rare and only for high-class customers because of its heavy cost. One of the most
disadvantages of delivery by ship is that marine transportation of Vietnam is not well-
developed. Due to a lack of heavy ship and professional logistics, Vietnamese exporters
have to transfer to Malaysia and Singapore ship before moving to the US. This result in
an increase of 20% cost of delivery, hence the higher price of products and makes it less
competitive in the market (Ca Hao, 2011). Therefore, since the slow-developed marine
transportation, we are losing our competitive to Thailand, which has a priority of airplane
delivery (subsidy 30%) and Mexico, which has a huge advantage of geography in the US
market.
100% of DF Vietnamese exporters to the Middle-East followed the CIF delivery method.
According to Incorterm 2010, delivery followed by CIF rule claimed that, exporters have
a responsibility to deliver merchandises to importers when the merchandises is at export’s
port, then transfers the responsibility at the time. In addition, exporters have a
responsibility to hire the delivery transportation and merchandises insurance at the port,
but the responsibility will be transferred at the delivery time. The advantage of CIF
method is that the exporters will follow to the price of CIF, which is higher than normal
FOB price, hence increase the foreign exchange income. Furthermore, exporters will
have their own right to hire the delivery partner and also merchandises insurance.
However, the exporters are paid only 30% or lower at the delivered time. Moreover, they
have to pay all the incurred costs during the merchandises transferred period. In fact, the
delivery period to the US last 20 days to 1 month, this will lead to a stagnant in liquidity
and a decrease in export efficiency. This is the main reason that DF exporters are discreet
to sell their product to the US.
d) Corporate association in DF exporting business:
In the reply to the Vietnam Business Forum magazine about corporate association,
Master Doan Duy Khuong, vice-president of commercial and industrial department of
Vietnam, president of consultant department ASEAN business (ASEAN-BAC) claimed,
“The awareness of most of Vietnamese business about association is limited, especially
small and medium business”. So, DF exporting businesses are not excluded from this
viewpoint.
Figure 2.7. Evaluation of Binh Thuan enterprises exporting dragon fruit to the US
about cooperation and experience exchange with peers
Unit: %
18%
45%
27%
9%
Very interested in and invested properly
Concerned but not invested significantly
Interested but not yet invested
not at all interested
(Source: Survey by the author)
Based on the writer’s survey, 31/48 businesses evaluated the association between DF
exporters in Binh Dinh is not tight and 5 businesses have a really bad connections with
others. Besides that, there are only 2/11 (18%) business showed the interesting about
sharing export experience between corporates, 1 business is definitely careless about this
problem (9%).
Figure 2.8. Evaluation of Binh Thuan dragon fruit enterprises about the
connection and reciprocity in production and exporting
Unit: %
Very good Good Fairly accepted
Poor Very poor
0 0
25.01
64.58
10.41
(Source: Survey by the author)
To conclude, the connection between DF exporting businesses in Binh Thuan is loose.
This results in a indirectly unworthy competition between domestic businesses.
Furthermore, lack of association will make the macro strategy, which requires huge
resources become very difficult.
2.2.2.3. In the U.S. market
a) Consumer trend
Food market in the United States are highly competitive and constantly changing because
of the sensitive taste of a huge amount of consumers. Currently, the important trends in
the consumption of fruit and vegetables in this market are related to health issues,
convenience, price, organic products and ethnic traditions of places around the world.
In terms of health, the U.S. consumers are increasingly concerned about this issue and are
willing to buy products which are healthier. Vegetables, vitamins provider, fiber and
minerals are the top choices of many consumers as one of the measures to help make
their lives healthier (Agroinfo, 2010).
In terms of convenience, the demand for convenience vegetable products is growing in
urban areas, including products which are pre-cut, processed and packaged; directly
processed from natural ingredients, no preservatives (Agroinfo, 2010).
In terms of diversity, the diversity of products plays an important role in the selection
criteria of American people. Consumers often require the diversity of product types and
designs which meet the particular needs of each customer group. Products not only meet
the criteria of quality but also are available in various choices for consumers. (Getachew
Abate, H.Christopher Peterson, 2005).
In terms of organic products, organic product lines are very popular in the United States
and other developed countries thanks to such features like rich nutrient richness, health
safety and environmental friendliness. The organic products have great competitiveness
in this market, and their prices are much higher than conventional products.
In terms of ethnic traditions from around the world, the demand for these products
increases rapidly due to the increase in population from other ethnic groups, especially
Asian countries. This trend is evident as the proportion of imported tropical fruits and
vegetables in the United States has increased rapidly in the recent years. (Shophia Huang,
Kuo Huang, 2007) For current consumer trends, the U.S. market has not only created
many opportunities for Binh Thuan dragon fruits but also quite large barriers. Binh Thuan
dragon fruits exported to the United States are only in the form of fresh fruit, not through
any pre-processing and processing stages. This is one of the reasons why the amount of
Binh Thuan dragon fruits exported to the U.S. market is still limited.
b) Consumer demand in dragon fruits
In spite of no statistics of the amount of dragon fruits consumed annually in the United
States, it can be seen from the statistics of those imported to the United States in recent
years that dragon fruits are increasingly popular in this market. The volume of imported
dragon fruits in the period 2008 - 2012 achieved an average growth rate of nearly 36%.
Figure 2.9. Volume of dragon fruits imported to the U.S in the period 2008 - 2012
Unit: 1000 kg
2008 2009 2010 2011 20120
200
400
600
800
1000
1200
1400
347.574 377.015
921.121
1240.1611119.229
(Source: US Department of Commerce)
The volume of dragon fruits imported in 2011 reached more than 1.2 thousand tons. In
2012, a significant amount of dragon fruits from Vietnam – a major supplier for the U.S.
market, cannot be imported into the market because of difficulties in Food Safety
Modernization Act of the U.S.A (FSMA). Therefore, the volume of imported dragon
fruits decreased, but still reached 1.1 thousand tons. Lamiro Lobo and some of
California's agricultural experts believe that the retail price of dragon fruits which is up to
$10/pound clearly illustrates that the demand outstrips the supply. Also, according to this
study, the American consumers prefer dragon fruits with red/pink skin, red/pink flesh to
red skin, white flesh. This is primarily due to the attractiveness of the colors. According
to another experiment on taste (consumers can taste but not see the color effect), 100% of
the survey participants like white flesh (Office of Agricultural Affairs Royal Thai
Embassy Washington, 2009). Farmers and businesses which export dragon fruits to the
United States should pay attention to understand consumers’ needs and tastes.
c) Source of supply of dragon fruits in the U.S. market
Domestic source of supply: Currently, there is no official statistical data of total volume
of dragon fruits harvested annually in the United States. Because the natural conditions of
most states are not favorable for the growth and development of dragon fruits, the dragon
fruits are grown only in California, Florida and Texas, where has been identified as areas
with suitable climatic conditions and soil for the growth, but only on very small scale. In
California, the acreage of growing dragon fruits is about 10 to 15 ha in 2010, the largest
plantation is 7 ha, the other areas cultivating dragon fruits remain below 1 hectare. Due to
quite suitable growing conditions, the dragon fruits have also been developed in Florida
recently. The acreage of dragon fruits planted here has increased significantly in recent
years with an area of 20 ha in 2006 and up to 130 ha in 2010. In addition, dragon fruits
are also grown in Hawaii, but not for sale. According to the unofficial estimate of
Hawaiian NASS Office, dragon fruits in this area take up approximately 5 ha (Edward A.
Evans, 2010).
Source of supply from imports: Until January 2013, only five countries including
Vietnam, Mexico, Colombia, Thailand and Nicaragua are allowed to import dragon fruits
into the U.S. market (USAD, 2013). The Central American countries are considered as
major competitors of the Asian exports of dragon fruits in the United States market
because its geographical distance, export costing including transportation, insurance,
storage costs ... are much lower compared to Asian countries, as well as the dragon fruits
are maintained fresher and longer after landed in the United States. However, dragon
fruits which are grown in the Central American countries are characterized by hard and
rough shells, short ears, not shiny surface and unattractive colors compared with those
grown in Asian countries such as Vietnam, Thailand. Currently, Mexican exports to the
United States dragon fruits with white flesh, red skin (Hylocereus untadus), Colombia
exports ones with white flesh, yellow skin (Hylocereus megalanthus). Nicaragua was
only allowed to import dragon fruits by the United States Department of Agriculture in
May, 2012. This country mainly plants ones with red flesh and is forecasted to export to
the United States 1000MT/ year (The Nicaragua Dispatch)3. In Asia, Thailand is the
second country after Vietnam allowed to import dragon into the U.S. market in August,
2011. Soil and ground conditions of Thailand are quite similar to Vietnam, so the dragon
fruits produced are not much different from those of Vietnam. In the future, Nicaragua
and Thailand are considered as major competitors of Vietnamese dragon fruits in general
and Binh Thuan in particular.
Figure 2.10. Volume of dragon fruits imported to the U.S in the period 2008 – 2012
by market share
Unit: 1000 kg
2008 2009 2010 2011 20120
200
400
600
800
1000
1200
1400
ThailandMexicoColombiaVietnam
(Source: Author compiled from website of the U.S. Department of Commerce)
According to the chart above, the proportion of dragon fruit volume exported from
Vietnam has almost always prevailed (from approximately 65% and above) since
Vietnam was allowed to import the dragon fruits into this market in 2008. Thus, the
source of supply of dragon fruits of the U.S. market is mainly import from Vietnam,
specifically Binh Thuan. Vietnamese dragon fruit tends to be the market leader, however,
it can be seen from the graph that the proportion of dragon fruit volume imported from
Vietnam in 2012 decreased significantly. One of the reasons is due to new agricultural
law of the United States, and the other is due to the appearance of Thailand – a new
competitor. Therefore, Vietnam needs to have strategic development plan for the dragon
fruits in the future to be able to maintain its leading position in this potential market.
2.3. Analysis of the real performance of Binh Thuan dragon fruit export activities
to the U.S. market in the period 2008 - 2012
2.3.1. Advantages and the initial results achieved
Although Binh Thuan dragon fruit has yet penetrated the U.S. market in a long time and
this item is also quite strange to such high-end market like the United States, thanks to
the advantages and inherent potential, the export of Binh Thuan dragon fruits in the
period 2008 - 2012 achieved remarkable results.
First, export industry of Binh Thuan dragon fruits has a significant progress when
overcoming the barriers of the U.S. to penetrate and gradually conquer this market. After
a period of research organizations, analysis laboratory, sending expert association to
practically check from planting, harvesting, preservation of dragon fruits and the
technical means used to quarantine in Binh Thuan, the Department of Animal and Plant
Quarantine and United States Department of Agriculture announced the acceptance of
Binh Thuan dragon fruits imported into the United States with irradiation conditions from
August 30th, 2008. This is a great significance to Vietnam dragon fruit industry. In
December, 2011, Binh Thuan dragon fruit, the first item in this category in the market,
officially owned brand, package, logo including "Dragon Fruit" and "Binh Thuan"
registered at the American Intellectual Property. After that, the United States allowed
Binh Thuan dragon fruit to be exported directly and irradiated in this country. There had
been no precedent for any Vietnamese fruits, which proves the increasing popularity of
Binh Thuan dragon fruit in this market.
Second, although the export volume and turn-over of dragon fruits to the US market only
make up a small proportion of the total export turn-over of Binh Thuan dragon fruits
(about 4%), they show a tremendous growth during the past time (the average growth rate
reached over 100%/ year), are relatively less volatile and predicted to increase in the
future.
Third, exports are more stable, and the product quality is improved. At the beginning,
exports to the United States were often interrupted due to the lack of source of supply of
goods. This is because the amount of areas of dragon fruits certified by VietGAP was
very low, as well as the facilities serving the processing after harvest like packaging,
plant irradiation ... were scarce and often overloaded. The quality of exported dragon
fruits also could not be guaranteed due to too long sea freight which was about 20-40
days, while the dragon fruits can only be preserved in the freezer in 21 days. This made
the rate of damaged dragon fruits was high, causing losses for exporters. Recently, the
exporters have made efforts to better the control of quality of the dragon fruits from the
fields to the port, so it has been improved markedly. The amount of areas of VietGAP
dragon fruits, packaging and irradiation companies certified by the U.S. standards are
increased, which makes the supply of dragon fruits more stable.
Besides, farmers and businesses also made the following achievements:
For the farmers who grow the dragon fruits, the awareness of the economic value of
dragon fruits has gradually changed, and there has been investment in research to develop
professional models for dragon fruit growth. This aims to meet the standards of the U.S.
market and around the world.
For the businesses which export dragon fruits to the U.S. market, there has been attention
of businesses to promotion export activities, as well as improvement in the quality of
human resources for the production and trading. Besides, in the community of dragon
fruit exporters, some businesses specializing in exporting dragon fruits with serious
investment in the scale of operation and development strategies have also appeared.
2.3.2. Problems and challenges
Apart from the outstanding results mentioned above, the general situation of the export of
Binh Thuan dragon fruits to the U.S. market in the period 2005 - 2012 has revealed some
existences worth mentioning.
The first one is lacking of preparation for sufficient sources of supply of qualified dragon
fruits for the export to the U.S. market.
The first reason is because the industry still has some constraints in terms of growing
dragon fruits according to GAP standards. Although the areas of production meet with
VietGAP standards, GlobalGAP of provinces have constantly increase during the past
time but only remained a small number compared to their actual potential. Also, due to
weak management capacity, there are still farmers who do not strictly implement the
VietGAP processes, such as misusing pesticides, not wearing work safe gear, carelessly
recording the VietGAP for traceability, etc., the actual amount of output which meets
with export standards is very low. In addition, the program which encourages farmers to
implement the VietGAP standards of Binh Thuan also have some limits because of the
low awareness of VietGAP of the farmers, which does not ensure a stable consumption
for VietGAP dragon fruits.
The second reason is because of limited technical and human resources in the processing
phase of dragon fruits after harvested. In fact, personnel involved in the process of
harvesting is mostly manual labor with low qualification and mainly based on experience
and instinct. Due to lack of skills of properly harvesting the dragon fruits, the amount of
dragon fruits which are immediately disqualified after harvest has been great so far.
Technical storage after harvest also plays an extremely important role.
The second constraint is lack of diversity of the output structure of dragon fruits exported
to the United States.
The first reason is due to weaknesses in research activities on dragon fruit seeds.
Currently, in Binh Thuan, there are only two types of dragon fruits planted including one
with white flesh and red skin, and the other with red flesh and red skin hybridized by
Fruit Research Institute Southern. Although the dragon fruits with red flesh has many
advantages and preferences, as well as higher value in the U.S. market, there are not
many areas of production in the province, and the dragon fruits with red flesh itself have
some characteristics which are unsuitable with the irradiation and storage conditions
during transportation to the United States, so the export volume is very low.
The second reason is the lack of proper development for processing industry of the
dragon fruits. Binh Thuan dragon fruits are only exported as fresh fruits, products made
from them have not been produced according to the industrial scale of export even though
the dragon fruits have the potential of being processed into a variety of products. This
will significantly impact the competitiveness of the dragon fruits in the future when the
market of fresh fruit begins to saturate and consumer trends increasingly tend to prefer
convenience products which are processed.
The third constraint is the lack of a healthy competitive environment, capability of
connecting the strength of the dragon fruit export businesses towards equal cooperation
and development.
This constraint is influenced by the lack of overall management of the activities of the
businesses in the industry. The number of dragon fruit businesses increases due to the
attractive profits of the industry, which leads to the appearances of "competing for
purchase and selling," unfair competitions, and struggles between the businesses. This
not only makes the interests of the businesses which have serious investment in efforts,
assets and intellectual resources for specialized products not be protected from those for
short-term profits, lack in investment in the mutual development of the industry, but also
have long-term effects on the development of the Binh Thuan.
The fourth constraint is promotional activities and promotion for the export of dragon
fruits to the U.S. market have not been focused.
The first reason is businesses do not actively participate in fairs and exhibitions in the
U.S. market. The U.S. commercial activities are always ebullient with competition of
millions of different products, so in the United States, trade fairs and exhibitions are
regularly organized in order to promote trade for agricultural imported commodities.
Only a small number of exporters in Binh Thuan are aware of the importance and
benefits of these activities to actively participate. The number of businesses have
participated in exhibitions or fairs is still less, which leads to a low number of businesses
which have access to this market and export. Furthermore, the low frequency of
participation reduces the opportunities for businesses to promote the cooperative relations
with partners, look for new partners, or even build a distribution system to boost exports
to the U.S. market.
The second reason is lack of proper investment in branding for Binh Thuan dragon fruits.
In recent years, the export businesses began to focus on brand building for the Binh
Thuan dragon fruits. However, due to lack of experience and capital, the number of
branded products is currently very little. The promotional and branding activities are rare.
Non-branded exported products have great impact on the value of export of the goods.
Sooner or later, the products will not have a stable position in the market, which leads to
unstable demand and passive pricing.
SUMMARY OF CHAPTER 2
From the theoretical basis which lays the groundwork for Chapter 1, in Chapter 2, the
author focuses on analyzing the status exports of Binh Thuan dragon fruits to the U.S.
market through the understanding of the U.S. market in period 2008 - 2012 and the
influencing factors to evaluate fully and objectively the existence of the constraints of the
growth of the dragon fruits businesses in Binh Thuan. The analysis is based on secondary
source of information from the local specialist reports and prestigious statistical agencies
of the United States and around the world, primary source of the actual survey of 48
export businesses of Binh Thuan dragon fruits in which 11 ones export to the U.S.
market. In addition to evaluating the existing aspects, the authors also highlight the
achieved results and identify challenges in the future for the Binh Thuan dragon fruits
exported to the U.S. market. This is the premise for the author to propose measures to
promote the export of Binh Thuan dragon fruits to the United States in the period 2013-
2020.
CHAPTER 3: SOLUTIONS TO PROMOTE BINH THUAN DRAGON FRUIT
EXPORT TO THE U.S MARKET
3.1. Foundations for solution
3.1.1. Orientation of government and local development strategy/policies for the
period 2013 - 2020
3.1.1.1. The development perspectives
– Firstly, the development of export base on comparative advantages and competitive
advantage ensure and contribute to rapid economic growth in high speed and
sustainability.
– Secondly, developing export based on the rational exploitation of natural resources,
limiting environmental pollution and resource depletion, improving ability to meet
regulations and environmental standards for exports.
– Thirdly, the development of exports contributes to social goals such as poverty
reduction, job creation to ensure social justice, fair benefit sharing between parties
involving in exporting.
3.1.1.2. Orientation of government and local development strategy/policies for the period
2013 - 2020
a) The period from present to 2015.
Binh Thuan authority has approved the project for developing green dragon fruit in Binh
Thuan from now to 2015. Accordingly, the goal of the project is to build the dragon
concentrate production zone with a professional management process, appropriate
market, sustainable development with major commodity rate, high quality in order to
food safety, efficiency, improving competition, meeting domestic and foreign markets;
while improving brand of Binh Thuan green dragon fruit.
At the same time, implementing Directive 4136 / CT-TT-BNN of MARD dated
15/12/2009 about the launch of the movement VietGAP applied in production of
vegetables, fruits, tea. According to the plan which has been approved Binh Thuan
province in Decision No. 2114 / QD-UBBT dated 03/08/2005 area for development green
dragon fruit will be 15,000 ha, yields 392 400 tones, average capacity 280 tons / ha. By
2012 there will be 90% of production in the province will meet VietGAP regulations, and
by 2015, it will be 100%. (Department of Planning and Investment of Binh Thuan, 2009).
b) For the period from 2015 to 2020
The main objective of this phase is that applies manufacturing process which produce
green dragon fruit for difficult markets and achieve Global GAP production process.
Developingconcentrate production zone, investing in science - technology to improve
quality, ensure food safety and hygiene in a sustainable way. At the same time promote
research in order to diversify export commodities, built the dragon intensive production,
focusing on infrastructure, roads, factories, as well as increasing the use of advance
science and technology, manufacturing technology, to increase the amount of preserved
products eligible for export, improve economic efficiency, increase the income of
farmers. (Department of Planning and Investment of Binh Thuan, 2009).
3.1.2. Prospects of Binh Thuan dragon fruit export to the U.S market in the period
2013 – 2020
3.1.2.1. Opportunities.
Firstly, the demand for imported green dragon fruit products in the United States is stable
and has trend to grow in the coming period. As discussed in Chapter 2, the United States
is the largest net importer of fruit and vegetables in the world, while the proportion of
imported tropical fruit is growing due to the increasing number of Asian immigrants.
Green dragon fruit which is a favorite of Asia for long time due to its freshness sweet, red
color, and dragon symbol - a symbol of nobility, symbolizing for luck and prosperity in
the spiritual life of people in Asia (Nguyen Van Ky, 2013). Although the green dragon
fruit is quite unfamiliar to indigenous European, but recent surveys show good feedbacks
from customers, especially the green dragon fruit is characterized by low-fiber, rich of
vitamins and minerals consistent which are suitable for the trend of consumers
increasingly concerned about the health in the United States.
Secondly, the relationship between Vietnam-United States is growing well. After signing
trade agreements Vietnam – US, the bilateral relationship is more harmonious and
friendly with good signals. The export turnover to the US market is an increasingly
important proportion of total exports. Only in the first year after the bilateral trade
agreement between the two countries in effect (2002), trade has increased significantly
from 220 million in 1994 to nearly 3 billion. For exports, the United States has become
the largest export market of Vietnam (excluding petroleum products) and Vietnam has
become the 34th largest exporters to the United States market (Bui Anh Tam, 2011). For
over 11 years, the US is the major export markets of many items of Binh Thuan, the US
Government is actively implementing programs to support the production and promotion
to promote commodity exports to the United States in the coming period.
3.1.1.1. Challenges
First, the risk of losing market share in the US dues to the rise of strong competitors as
well as increases stringent demands from consumers. Green dragon fruit originating from
Thai is assessed will compete strongly with Binh Thuan green dragon fruit in the future
because Thailand is a country with developed agriculture, widely applicable and effective
practice standards Thai GAP, Global GAP and scientific progress – technology in
agriculture in agriculture. In the field of fruits, Thailand has produced many fruits with
high yield, taste appeal, and constantly meet consumer tastes. Thailand also has close
trade relationship with the United States. Moreover, The US is current major market for
export fruit of Thai Lan. Besides that, the US consumer will be more difficult and ask for
more demands in terms of quality, food safety and product diversification. The exporters
of Binh Thuan should be sensitive, rapidly capture these needs and respond promptly to
maintain its position in the US market.
Second, freight cost is continued to increase while always adjust according to the market
price which makes the profit of green dragon fruit export business in Binh Thuan is
affected. In case the export market has a long distance as US the shipping freight is often
up to 85% on export cost. Meanwhile, fuel oil price is high and tends to increase as well
as the world economic situation is continuous fluctuation. The fuel oil price is expected
to continuously increase in the future. In addition, the transport capacity of Vietnam is
weak compared with the average of the region, the cost of transport of Vietnam is
generally higher than 10-15% compared to other regional countries like Thailand ,
Malaysia. This caused great pressure on exporters on the plan for capital, profits and
competitive strategies for green dragon fruit goods in the world market.
Third, the unstable regulatory environment is due to implementing agricultural laws and
new agreements Law Modernization food safety of the US. As discussed in Chapter 2,
FSMA Laws remaining in the new implementation period will be expected to change in
the rules for imports of agricultural products in the United States. Specifically, as the
requirement for register the origin or strict control of pesticide residues in imported fruits.
In 2011, although many shipments of Binh Thuan green dragon exporters trapped in this
country due to customs inspection of residues of plant protection products but the US side
has yet to have a formal written guidelines allowing the level of its. Thus, in the short
term, enterprises should actively seize and share of legal information and have strategies
needed to improve the quality of products to meet international standards in the long
term.
3.2. The solutions to boost the export of Binh Thuan dragon fruit to the U.S
market
3.2.1. Group of solutions to enhance the connections in the supply chain of Binh
Thuan dragon fruit for the U.S market
3.2.1.1. The objective of the solution
From the late of the 20th century, the method of "Supply Chain" has become mandatory
for every state, business, organizations or individuals to survive and thrive in this
globalization and technology era. Reviewing and connecting stages in the supply chain of
agricultural products is an inevitable path to bring up the stability in production and
consumption, and improve the quality and reputation of agricultural products in both
inbound and outbound consumption.
The Chain to supply Binh Thuan dragon fruit to the US market includes those basic
stages: Producers (farmers, cooperatives, etc), Exporters, Importers, Retailers and
Consumers the United States. For years, the concept between enterprises and farmers,
between the distributor and the retailer, etc have been mentioned a lot in the development
policies in Binh Thuan provincial government, however, the actual efficiency is not really
high. Inside of the supply chain, there have many weaknesses, particularly the weak links
between the chains, leading to the uncertainty not only in price and supply-demand, but
also in the efficiency of quality control process exporting those items to the United
States.
Moreover, without well-organized institution of the connection between farmers who
grow dragon fruits, there has led to the uncontrolled raise in the amount of dragon fruits
farmers which leads to the oversupply, while dragon fruit quality is not managed.
Exported enterprises themselves also lack credibility and sense of cooperation, they often
scramble for sales causing unstable export price and discredit to US importers.
Figure 3.1. Supply chain of Binh Thuan dragon fruit exported to the U.S market
It is clearly to be seen in this supply chain, the production and export enterprises state in
the first and second positions, which are really important but also easily to be replaced by
Producers (farmers, cooperatives, etc), Exporters Importers Consumer (Super market,
Traditional Market, etc)
the other suppliers from Thailand, China, South America with their more competitive
price, products outlook, and of course the quality. For that reason, consolidating and
improving the supply chain of Binh Thuan dragon fruit is the only and inevitable path
towards the sustainable development of exports this fruit to US market.
3.2.1.2. Details of the solution
a) Strengthening the connection and cooperation between farmers
Linking farmers is a useful solution to enhance the financial and human resources ability,
to ensure the proper cultivation techniques for productive and quality products, while
applying the latest technologies in cultivation. This action would play an essential role in
changing farming practices of farmers, training sense of disciplines, community-based,
sustainable production and sense of responsibility for their own product.
The author proposes a solution to build up a VietGAP cooperative organization, which is
developed based on VietGAP groups-production model in Binh Thuan. Beside guiding
and controlling production processes under old model of VietGAP standard, the
Cooperative also has the function of financial support, provision of production input
services and consumption products. The steps are as follows:
First, connecting farmers who have registered VietGAP standard in manufacturing, in a
certain geographical scope (can be a commune or a district), to ensure the conditions of
soil and climate are similar around the area of the established cooperative. Members of
the cooperative could participate on a voluntary basis, however, they should have a clear
commitment to their responsibilities and rights toward the cooperative activities.
Second, it is necessary to form up a team of agricultural scientists specializing in this
fruit, who have adequate qualifications, knowledge and well-trained skills of cultivation
based on farming standards of VietGAP, and can regularly work in the cooperative.
Those scientists will directly involve in the cultivation of green dragon fruit; apply new
technology scientific achievements in farming and processing the fruit; guide farmers for
cultivation techniques for high yield and quality; convey researches and propose further
measures to improve the quality of the fruit, based on farming practices of the
cooperative.
Third, building a market team who has knowledge and experiences in terms of
argricultural products. This team will be in chare of penetrading market, doing market
survey to do manufactoring planning, discovering high-value deals to supply input
services with low prices for farmers as building materials, fertilizer, labor resources…,
getting into more new markets to work in a long-term period.
Next, creating a close link between farmers and authorized organizations regarding
finacial problems to support farmers.
c) Strengthening the connection and cooperation between farmers and business
The next step after having the centralized production zone is making connection between
exporters and farmers as VietGap cooperative organization to build a full process from
production to consumption. The VietGap cooperative organization is designed to be a
farmer’s representative who takes responsibilty in contract negotiation. On the other
hand, exporters who can support farmers in doing consumption plan based on their
knowledge of market information. Besides, these businesses also can supply input
materials as technical process, new technology to ensure product’s quality. This
cooperation makes Viet GAP dragon fruit have long-term consumption market to ensure
VietGAP brand reputation.
Figure 3.2. Export enterprise – Cooperative cooperation process
First, exporters and Cooperative Organization will have a contract with series of rules
that farmers need to follow up during manufactoring period. For farmer side, they need to
ensure product’s quality as size, weight…; technical rules in manufactoring process,
solutions to face with any risks happening relating to weather or market volatility. For
business side, they will do tranining for farmers about new technology, legal
knowledge…
Second, exporters will supply farmers plant seeding and input materials. During this
progress, both business and cooperation organization need to work closely to make sure
about production schedule, technical requirments and also having supports on time in the
case of having disease, fluctuations in weather.
Third, business needs to ensure the product’s price in case of normal market or the
fluctuations of price and manufacturing.
d) Strengthening the connection and cooperation between exporters
This can be worked into two ways: horizontal integration between exporters and shipping
– packing company, vertical integration between exporters. This process will have many
Plant breeding, material supply
Performance monitoring
Purchase
benefits for dragon fruit exporters in Binh Thuan. First, exporters can share their
knowledge about America market to give forecast regarding needs and price in total
market, which helps business go in a good strategy in each period of time. Second, these
organization can save transportation costs and make sure about product’s avalibility.
Figure 3.3. Export enterprise cooperation process
(Author’s suggestion)
First, exporters can have needed information by two ways. The first one is from
authorized orgnization. Binh Thuan dragon fruit organization must be in charge of
permanently doing market research regarding US’s market need in dragon fruit and any
information about US import policy. The second one is from their import partners and
then sharing between local exportes. This cooperation will be conducted in a large scale
and be monitored by Binh Thuan dragon fruit organization to ensure about confidential
information and healthy competition.
Second, after having a cooperation about information, transportation link is the next step.
This will help business save transportation costs and make sure the contract’s quality
with US company in terms of delivery time, product quality.
Next, purchase and inventory cooperation is the next step after having above connection.
This will help business ensure the product’s inventory and avalability in terms of
exporting dragon fruit into US market.
Market forecast
Transportation cooperation
Perchase cooperation
Having a price floor
Training cooperation
Final, having a price floor is needed to make sure about healthy competition between
exporters and also ensure Binh Thuan dragon fruit brand repuation.
e) Strengthening the connection and cooperation between exporters and importers
At present, Binh Thuan exporters usually do their business through a third party to export
products to US market. This makes some limitations happening in terms of consumers
reach or market access. Therefore, these business need to strenghthen relationship with
import partners through long-term contract or holding customer conferences.
3.2.2. Group of solutions to accelerate and improve production efficiency applying
GAP standard to increase export supplying sources
Binh Thuan’s dragon fruit exporting volume to the US market was recently low is mainly
due to low quality products. Good Agricultural Practice Vietnam (VietGAP) is the
standard of good agricultural practices in the production, harvest and post-harvest
processing of agricultural products, focusing on quality management, safety and
traceability originated during the manufacturing process from planting until the product is
delivered to the first purchase. This is the standard that applies to the United States
dragon goods imported from Vietnam. Safe vegetable production with GAP criteria
(VietGAP, GlobalGAP ...) is the general trend in the world. Therefore, implementing
domestic mushroom production with VietGAP standards will help Binh Thuan’s dragon
fruit reaches the world standards, enhance exports to the US market, and improve the
competitiveness of the dragon items, especially when Vietnam has joined WTO.
By studying the process of implementation of the program to support farmers producing
dragon fruit with GAP standard, executing by Development Center of Binh Thuan since
2005, the author proposes two solutions to solve current principal difficult situation of
Binh Thuan’s VietGAP dragon fruits are to be still entangled residues of pesticides and
high excitation, and no stable outlet for VietGAP products to encourage farmers to assure
production implementation.
3.2.2.1. The organic production method of dragon fruit
a) The objectives of the solution
Regarding to fertilizer, the GlobalGAP standards as well as the VietGAP standards
regardless use chemical fertilizers or organic fertilizers that are only interested in the
land, the development of crops and residues of fertilizers and pesticides. Thus, the use of
fertilizers in order to help plant has been well developed, maintaining the fertility of
arable land and limiting toxic residues than the threshold is the most important. On the
other hand, the use of drugs such BVTT fruit tree has produced a situation analysis in
Chapter 2 is an alarm bell for the province's manufacturing industry in particular and the
country in general about the abuse of drugs fertilizers for plants improper, which is
serious violated of safety and hygiene of food. So the organic production of dragon fruit,
which is only used purely organic fertilizer and preparation activities during the breeding
easy to help farmers produce products with residues of fertilizers, pesticides low ,
standard export market of the United States.
b) Details of the solution
To ensure standards BVTT drugs under the required threshold to achieve the export
criteria, dragon fruit producers should comply with the principle "5 NO" and "4 TRUE":
The principle of "5 NO" as follows:
- Do not use too many toxic drugs
- Do not use the drug which has high used substance
- Do not use overdose
- Do not use drugs during isolation
The principle of "4 TRUE" as follows:
- True drugs
- Correct dosage
- Correct concentration
- The right time
To achieve these standards, the use of organic fertilizers processed under complete
technology is the most feasible. The author would like to introduce fertilizers, pesticides
suitable for garden planting dragon, which does not fully meet the nutrients, but also are
friendly to the environment - one of the popular trends in contemporary agricultural
production.
Compost fertilizer original Black Castings is an organic fertilizer, which is completely
natural. This is a refined product distribution worms, worms are raised in climate
conditions are stringent quality control. Classification is full of essential nutrients for
plant growth should be able to replace chemical fertilizers. In addition, the nutritional
composition and microbial sources will be useful in improving soil structure, restoration
of beneficial microorganisms in the soil and bring the porous, fertile soil for the damaged
area caused by the use of chemical fertilizers and plant protection products. The
difference in the number of layers of calcium distribution in the county will be
decomposed in the soil under the plant's nutritional needs for a long time, limiting the
loss of nutrients when irrigated and rain.
Organic fertilizer foliar Vermaplex is the biological organic fertilizer liquid fertilizer
derived from earthworm refined, derived from 100% natural humic acid, from yucca
extract, kelp extract the sea and the amino acid. Classification is full of nutrients, growth
stimulants natural, vitamins, enzymes and beneficial microorganisms to the soil and
plants.
Step 1: Apply the finish just before harvest
- Applying fertilizer for plants to recover after the previous breeding season, which had
lost power. Last fertilizer combined pruning and weeding around the dragon head.
- Use compost Black Castings, Fertilizers from 0.3 - 0.5 kg / root
Step 2: Apply stimulate flowering. If the season is applied before 7 days of preparation
lighting.
- Use 0.3 - 0.5 kg / Black Castings original distribution.
- Use more foliar spray Vermaplex during this period to help the flowers focus, limit the
bud rot.
Step 3: This is a growing stage
- Four additional compost Black Castings liquid (used to irrigate the surrounding
cylindrical shape loose stools mixed with water, the faster and more efficient will not hurt
the root system).
- Spray add preparations Vermaplex left to make fast, beautiful red, left ear length, stiffer.
Step 4: Stage before harvest
- Fertilizing this stage in order to continue to the left, thick skin, hard, beautiful red
increase the commercial value of the left.
- This phase using foliar high levels of natural growth stimulants and trace elements in
order to improve fruit quality.
3.2.2.2. Branding and ensure consumer products of VietGap dragon in the domestic
market
a) The objectives of the solution
The production of dragon fruit followed GAP standard naturally costs more expensive
than traditional methods, but actually in Vietnam, VietGAP dragon fruits is not
necessarily better priced than conventional dragon fruits. On a dragon garden followed
VietGAP standard, because only the products with perfect quality will be exported to the
United States, but this is not so many, most of the rest dragon fruits with lower quality
are sold to local traders, often forced as usual price of dragon fruits, even in the case of
cheap consumer prices as many farmers are frustrated with VietGAP. Therefore,
branding and product consumption habits of VietGAP dragon fruits for domestic
consumption does not only helps dragon VietGAP have been achieved worthy position,
but also opens the way for the production trend dragon found safe strong growth, while
ensures the health and quality of life for consumers in Vietnam.
b) Details of the solution
First, building systems VietGAP dragon logo, which is unified across nation to
demonstrate the quality products of VietGAP. The logo should be designed elite, with
eye-catching colors, ease of identification, tamper and waterproof, peeling, tearing during
transport. Content logo should have clear growing region code for traceability when
necessary (the characteristics of the product GAP).
Second, the state agency should coordinate with the production facilities and construction
business registration system and strict brand management to ensure only the dragon
originates from certified plantations VietGAP will be granted the new logo in circulation.
Also need to have clear sanctions, strictly for violations to maintain the prestige brand
VietGAP in the hearts of consumers.
Third, training knowledge, skills, identifying logo VietGAP for stakeholders including
farmers, businesses, owners of distribution facilities ... to ensure the parties to understand
clear and strict implementation, unified process flow of products from VietGAP.
Third, now actively contracting distribution VietGAP dragon with local supermarkets,
from that the dragon VietGAP markets have stabilized at a reasonable price, to encourage
farmers assured the development area for VietGAP dragon.
Fourth, promote strategic planning, communications products widely VietGAP to
consumers nationwide. The strategy should emphasize activities VietGAP brand identity,
creating broad awareness of the benefits of the product VietGAP for the health of
consumers. Creating consumer confidence in the brand VietGAP is a crucial factor to the
success of the dragon of VietGAP in the domestic market.
3.2.3. Group of solutions to diversify exports
Diversification is the process of transformation, creating a variety of products from
traditional products available, and modified and exotic types of the same product, rich in
variety and designs from the raw products to processed products. Currently, the product
structure of Binh Thuan dragon fruit exports to the US market is still very poor, only
firms exporting fresh fruits, mainly White flesh, red flesh is weak although the US market
United proved popular product categories over. Partly because the red dragon fruit area of
the province is limited, another reason is the red dragon fruit with thin skin and white
flesh dragon fruit softer, high failure rates after the irradiation. Meanwhile, the US capital
market is extremely dynamic, constantly changing and there is high demand for product
diversity. So focused research to enrich the product is exported dragon strategic solutions
aimed at enhancing competitiveness and expanding consumer market of Binh Thuan
dragon fruit commodities market in US States.
3.2.3.1. Diversification of export by means of breeding dragon
a) The objective of the solution
While traditional dragon only 3 main varieties as mentioned in Chapter 1, Binh Thuan
dragon fruit are 2 types of red and white inside red dragon fruit, red shell, but the actual
dragon fruit is particularly easy to breed many different colors for both pulp and peel.
The color of the flesh can vary from white, pale pink, orange, dark pink, red to purple in
the pods is pink (natural green), red (green ears), yellow (golden ears) , green (green
ears). Promote research to breed new varieties of dragon will diversify dragon export
commodities, consumer appeal, while creating a rich resource to serve the diverse needs
of the processing industry products from the dragon in the future.
b) Details of solution
First, the Institute for Southern Fruit performs a survey and collect information about the
dragon is not the same in Vietnam, researches, hybridizes between exotic breeds with
similar traditional dragon in order to have the source of new varieties which are
consistent, and have strong growth in Binh Thuan climatic conditions.
Second, the scientific staff of the Institute of Fruit South collaborated with the
Department of Agriculture Binh Thuan conducted pilot plant new seed production with
GAP safety process with a moderate scale in the specialized areas of the province. After
achieving positive results, the Department of Agriculture requires specific strategies to
replicate the same scale new province. Association of Binh Thuan dragon fruit farmer
encourages famers to understand and apply new dragon hatchery. At the same time they
also provides extension staff support, organizes training for farmers the farming practices
with effective and high yield.
Third, introduce, promote new products dragon in the US market. Several methods can be
very effective: the export enterprises can directly introduce new products to the importer
in the United States, organizing fairs and exhibitions dragon items in the United States ...
The Exporters need to coordinate multiple marketing methods to introduce the dragon
fruit products widely, and to create consumption habits for consumers in the United
States.
3.2.3.2. Diversification of products by processing dragon fruits
a) The objectives of the solution
Proceed producing many products made from dragon plays an important role in the
diversification of export commodities dragon to the United States. Besides exporting
fresh fruit dragon fruit is small, no weight gain or form can be used for processing canned
products. Dragon fruit has many nutrients, can be processed into various products such as
dragon fruit jam, juice, jelly dragon, dragon cream, syrup, dragon, dragon fruit wine ... to
be able to meet the diverse needs of consumers. Development processing industry is not
only to expand markets for dragon goods, but also has many positive economic – social
impacts as promoting breaking provincial economic development, technology transfering,
creating jobs, improving people's life ...
b) Details of the solution
Firstly, the establishment of investment funds research, cooperation with scientists to
conduct research and create products made from dragon during the earliest and most
effective. State policies should support and encourage all organizations and individuals of
all economic sectors to participate in research how to make different products from
dragon to bring high efficiency and meet production export requirements to the United
States. Some products show their potential in the US market are canned dragon, dragon
pure juice ... because this market which is preferred the convenience and natural product
extracts health benefits.
Secondly, state agencies and provincial leaders should facilitate the development of
processing activities in the province dragon with specific policies for financial support,
activities to attract domestic and foreign investment, exchange learning and technology
transfer, from that the enterprise can build factories, production facilities and processing
chain dragon with modern technology, create innovative products on the market
competitiveness school. Besides, the State should also actively invests in infrastructure
and other macroeconomic factors that creates a favorable environment for the processing
dragon fruit industry development.
Thirdly, the development of domestic consumption will need to create a firm basis then
new businesses surveyed consumer demand, market information in the United States to
ensure successful product in the US market.
3.2.4. Group of solutions to boost marketing and promotion of exports to the US
market
3.2.4.1. Solutions for brand development of Binh Thuan dragon fruit the U.S market
a) Objectives of the solution
Brand building for Binh Thuan dragon fruit should be received adequate attention and in
focus right now because this is an important factor in long-term development strategy for
the industry and also mean that effectively support for the dragon fruit export businesses
in the province. Currently, Binh Thuan dragon fruit have the advantage of dominant
market leader in the United States, if this can be utilized to build a deep impression in
the minds of consumers, it will enhance the value and competitiveness of the Binh Thuan
dragon fruit compared to following competitors. Besides, the successful development of
Binh Thuan dragon fruit brand, or any other Vietnamese products, will have a huge
impact in upgrading the image, brand of Vietnam generally in the eyes of international
friends, thereby attracting investment, tourism... to Vietnam and become great impetus
towards overall growth of the economy.
b) Details of the solution
Firstly, brand positioning: identify the outstanding value of Binh Thuan dragon fruit than
compared to one of other country to orrientedly encourage and coordinate with potential
business in branding for Binh Thuan dragon fruit, into branding program countries. This
is the most decisive factor to the success of building brand image for Binh Thuan dragon
fruit.
Secondly, the United States should be determined as potential market for brand
development of Binh Thuan dragon. Then market research and analysis should be
conducted/activated to figure out the needs of targeted customers in term of
understanding the factors that help build confidence of consumers in the product, bring
added value to customer… for the purpose of forming a system of generic criteria for the
construction and development of dragon fruit brand in the market.
Thirdly, continue to conduct surveys of consumers in the targeted markets to learn about
the level of awareness of consumers for the product.
Fourthly, to suggest a strategy to develop brand image based on consumer needs and
brand positioning, which effectively reflects the characteristics of the product and
contains the elements to bring added value to the product in the market. This will
gradually shape the brand image in the market.
Fifthly, identify market barriers to dragon fruit in order to outlines appropriate promotion
plans to facilitate the access to the US market. In particular, attention should be paid to
the trade fairs, exhibitions in both national and international scale, with the proactive
engagement of firms in the industry. This approach provides very high communication
efficiency, helping the image of Binh Thuan dragon fruit create the impression in the
eyes of foreign partners.
3.2.4.2. Group of solutions to promote brand of Binh Thuan dragon fruit through Mui
Ne – Phan Thiet tourism
a) Objectives of the solution
Binh Thuan province has a highly developed marine tourism industry with tourist center
of Phan Thiet - Mui Ne, which attracts millions of both local and foreign tourists,
including a substantial number of tourists having U.S citizenship. The implementation of
brand promotion for Binh Thuan dragon fruit directly in the US market is often difficult
due to geographical distance, lack of experience, as well as at considerable cost. Taking
advantage of the tourism strengths to widely advertise Binh Thuan dragon fruit to U.S
tourists just could be done easily, giving a deep impression of brand on customers and
facilitate a significant amount of on-the-spot export.
b) Details of the solution
The Binh Thuan Department of Commerce & Tourism Binh Thuan should hold a mutual
action program for businesses in the province, encouraging them to create fresh
initiatives in helping product promotion via Binh Thuan tourism activities. The authors
would like propose a number of feasible activities:
- Ecotourism, visiting dragon fruit farms in the mountainous areas with a cool climate,
enjoying the fresh dragon fruit on the spot.
- Adding the dishes using ingredients from dragon fruit to daily menu for tourists as
"dragon book shrimp", "dragon stir-fried", "fried dragon", "dragon braised"…
- Travel agents introducing dragon from fresh form to processed products, souvenirs
dragon fruit image at plenty of the tourist destinations.
- Promote the dragon fruit as one of the specialties of Binh Thuan land on the travel
website, brochure ... to create the impression of "Yet never eat dragon that still never
come to Binh Thuan".
- Binh Thuan Department of Commerce may call for investment to organize tourism
festival program on large-scale such as "Fruit Festival", "Food Universe" to introduce
dragon fruit specialty.
3.3. Some general recommendations to the Government and the Ministries
concerned with the aim to foster the export of Binh Thuan dragon fruit to the
US market
In addition to the solutions presented in Section 3.2, the author would like to suggest
some recommendations to the Government and the Ministries concerned to help reinforce
and further develop the production and export activities of Binh Thuan dragon fruit to the
US market in the period 2012 - 2020:
First of all, continue to reinforce Socialist-oriented market economy and perfect legal
system, mechanisms and macroeconomic policies in order to create a fair, effective and
competitiveness-fostering business environment that help create confidence for
businesses to expand production scale and practice business.
Secondly, the Ministry of Finance to design a loan program with preferential interest rate
or extended repayment and Second and Priority Development Assistance Fund for the
development support of agricultural and processed food business to help farmers and
enterprises expand production scale, improve technology to raise quality, productivity,
efficiency and competitiveness of dragon fruit export.
Thirdly, the Ministry of Commerce and the Ministry of Foreign Affairs should introduce
policies to foster harmonious relationships between Vietnam and the United States and
increasingly release approval of trade promotion projects/programs between two
countries to strengthen economic cooperation in various fields, especially in agriculture
sector and attract investment in this area. Many opportunities for collaboration with U.S
companies would also be opened.
Fouthly, the Ministry of Science and Technology demands to enhance technolog,
especially the kind of high-tech technology as well as application of science and
advanced technology to create breakthrough in production, productivity and business
management.
Fifthly, export promotion programs should be considered as one of the key national
programs. For emerging markets, the Ministry of Commerce should steer exploring
research and provide sufficient information to help local businesses to exploit these
markets.
Sixthly, the Ministry of Commerce and the Ministry of Agriculture and Rural
Development should direct relevant agencies, localities to provide technical assistance to
exporters in procedures such as plant quarantine, certificate of origin…
Seventhly, for the dragon domestic market, the Ministry of Agriculture and Rural
Development and the Ministry of Health should boost communication on health benefits
of dragon fruit and the use safe product originated from GAP cultivation.
SUMMARY OF CHAPTER 3
In chapter 3, the author raised the solutions to promote export of Binh Thuan dragon fruit
to the US market in the period 2013 - 2020. With the aim of developing this industry in
Binh Thuan, strengthening internal resources being the foundation for accelerating export
to important targeted market including the United States, the solutions and
recommendations are proposed based on the analysis and assessment of the status and
prospects of both Binh Thuan dragon fruit and the U.S market in Chapter 1 and 2. For
each solution, the authors illustrated specific steps to enhance the feasibility of the
solution.
CONCLUSION
The U.S is one of the strategic markets to the sustainable development of dragon fruit
export, production and related businesses in Binh Thuan. The thesis focus on research
and analysis of the macroeconomic/microeconomic factors affecting the export market
dragon on both sides, the Binh Thuan and the US market, as well as evaluate the capacity
of Binh Thuan in supplying for this market through the analysis of current situation of
Binh Thuan dragon fruit export activities to the US market in the period 2008-2012. The
data serving baseline study has been compiled from the statistics of the US government
as well as departments and agencies in Binh Thuan Province, partly surveys conducted by
author of dragon fruit export businesses and growers in Binh Thuan province. Then, the
author assessed the achievements in parallel with existing challenges ahead, as
foundation for proposing recommendations and solutions aimed to boost Binh Thuan
dragon export to the U.S market in the period 2013-2020. According to which, the
solution system consists of 4 groups of solutions at the macro level and another 4 groups
of solutions at the micro level, focused to solve three main issues: to design Binh Thuan
dragon fruit as a national brand to enhance competitive advantages of the fruit in global
market; to speed up the application of GAP standards in production; and to facilitate
promotion activities for dragon fruit in both local and the U.S market. With each solution,
the author also stated goals of the solution as well as the detailed steps should be taken.
In limited scope of the thesis research, the solutions are designed and analyzed briefly,
not delved into assessment of effectiveness and impact to overall dragon fruit export
activities to the U.S. In particular, the issue of branding and business cooperation to
enhance the competitiveness of the sector requires in-depth research at large-scale to get
effective results as expected.
REFERENCES
Vietnamese References
[1] Axis Research, 2005, Supply Chain of Binh Thuan Dragon Fruit, pp. 11-12
[2] Agroinfo, 2010, The U.S Import Market, pp. 7-5
[3] Nguyen Thi Tram Anh and Cao Thi Thu Trang, 2010, Developing collaborative
production model of Binh Thuan dragon fruit, Journal of Science and Technology -
University of Danang, pp. 6-7
[4] Binh Thuan Plant Protection Agency, 2008, Stimulant using model for the dragon
fruit, pp. 5-16
[5] Nguyen Van Binh, 2011, Dragon fruit and dragon fruit frozen cocktail processing
techniques, Ho Chi Minh University of Science and Technology
[6] Binh Thuan Customs, 2010, Binh Thuan export performance report in the period 2006
– 2010, pp. 98-99
[7] Tran Minh Dao and Vu Tri Dung, 2011, International Marketing, National Economics
University Press, pp. 98-99
[8] Michael Hugos, 2010, Essentials of Supply Chain Management, Ho Chi Minh
General Publishing House, pp. 117-119
[9] Nguyen Thu Huyen and collaborators, 2009, Paying attention to preservation of
agricultural products to improve the quality and economic efficiency, The Vietnam
Institue of Educational Sciences - Research Center for Non-Formal Education
[10] Trinh Thi Thu Huong, 2011, Transport and Insurance in Foreign Trade, Information
and Communications Publishing House, pp. 284-378
[11] Dinh Ngoc Loan, 2010, Diversifying products made from dragon fruit, Nong Lam
University – Fruit & Vegetable Research Center, pp. 25-33
[12] Bui Xuan Luu and Nguyen Huu Khai, 2009, International Economics, Information
and Communications Publishing House, pp. 279-284
[13] Bich Nghi, 2012, Private label and trademark for Binh Thuan dragon fruit, Binh
Thuan Newspaper, 03/07/2012, pp. 6
[14] Binh Thuan Department of Industry and Trade, Annual report of dragon fruit
production, consumption, export and measures to boost consumption of dragon fruit in
the next period, Report no. BC 184 12/2012, pp. 2-4
[15] Binh Thuan Department of Agriculture and Rural Development, 2006, Registration
application for trademark protection as an international trademark for “Binh Thuan
dragon fruit”, No. 1797/SNN, pp. 2-4
[16] Binh Thuan Research Center for Dragon Fruit Development, 2010, The production
process of dragon fruit under VietGAP Standards, Binh Thuan Department of Agriculture
and Rural Development, pp. 10-17
English references
[17] Getachew Abate and H. Christopher Peterson, 2008, Rapid Opportunity Assesment:
Fruit Sector, pp.16-19
[18] Animal and Plant Health Inspection Service (USDA), 2008, Questions and Answers:
Importing Vietnamsese Dragon Fruit to the United States, September 2008, pp. 1-2
[19] Linda Calvin and Reberta Cook, 2011, U.S Fresh Fruit and Vegatable Marketing:
Emerging Trade Practices, Trends and Issues, Economic Research Service (USDA),
pp.38-40
[20] J. Crane and C. Belerdi, 2004, Dragon Fruit, Institute of Food and Agricultural
Sciences, University of Florida, pp. 4-10
[21] Sophia Huang and Kuo Huang, 2007, Increased U.S Imports of Fresh Fruit and
Vegatables. Economic Research Service (USDA), September 2007, Pp. 10-16
[22] Renee Johnson, 2012, The U.S Trade Situation for Fruit and Vegetable Products,
Congressional Research Service, 25 January 2012, pp 5-13
[23] Sven Merten, 2008, A Review of Hylocereus Production in the United States, pp. 1-
4
[24] United States Department of Agriculture, 2013, Fresh Fruits and Vegetables Import
Manual, pp. 122-135
[25] Kilungu Nzaku and Jack E. Houston, 2010, Analysis of U.S Demand for Fresh Fruit
and Vegetable Imports, Agricultural Economics Association of Geogia, 28 February
2010, pp 168-172
[26] Office of Agricultural Affairs Royal Thai Embassy Washington, 2009, Thai Fruit
Marketing Survey: Data and Analysis, March 2009, pp. 37-39
[27] Nguyen Phuong Thao and John E. Bowman, 2006, Good Agricultural Practices and
EUROGAP Certification for Vietnam’s Small Farmer – Based Dragon Fruit Industry,
USAID RAISE SPS Project Development Alternatives Inc, pp. 5-9
[28] United States International Trade Commission, 2013, Harmonized Tariff Schedule
of the United States (2013) – Chapter 8: Edible Fruit and Nuts; Peel of Citrus Fruit or
Melons, pp. 12
APPENDICES
Appendix A: Questionare for Growers to Assess the Reality of Binh Thuan Dragon Fruit
Production in Agreement with VietGAP Standards
Appendix B: Survey Results after Processing by Microsoft Excel
Appendix C: Questionare for Enterprises to Assess the Reality of Binh Thuan Dragon
Fruit Export Activities to the U.S Market
Appendix D: Survey Results after Processing by SPSS
APPENDIX A: QUESTIONARE FOR GROWERS TO ASSESS THE REALITY OF
BINH THUAN DRAGON FRUIT PRODUCTION IN AGREEMENT WITH VIETGAP
STANDARDS
This survey is designed for our thesis research into the reality of Binh Thuan dragon fruit
production in agrrement with VietGAP standards. Throughout this research, we want to
contribute solutions to help farmers improve production processes, able to produce
products of high quality, safe for health, satisfying increasingly stringent requirements of
the domestic market as well as export. We assure you that all your reponses will be held
strictly confidential and used for research purposes only. We wish to receive your help.
Thank you very much!
A. Personal information
Full name:
Address:
B. Cultivation techniques
1. Selecting dragon fruit varieties
1.1. Dragon fruit variety
Red skin, white flesh
Red skin, red flesh
1.2. Selecting budwood
Randomly select (any branches on the plant can be used as crafted stem)
Select healthy branches that never produce fruit
Select healthy branches that have produced fruit once
Select healthy branches that have produced fruit 1 – 2 times
Select healthy branches that have produced fruit more than 2 times
Buy budwood from others (Buy from: )
2. Cultivating
2.1. Planting density
Under 2.5m x 2.5m
From 2.5m x 2.5m to 3m x 3m
Over 3m x 3m
2.2. Types of fertilizer applied
Compost
Inorganic fertilizer
Both types
2.3. Composting time
Less than 1 month
From 1 to less than 2 months
From 2 to less than 3 months
From 3 months
No self-composting in the garden
2.4. Frequency of fertilizer application
a) When making cuttings
Once a month
Once per two month
Less than once per two month
b) When the plant climb to the top of the pillar to budding
Once a month
Once per two month
Less than once per two month
c) Do you apply fertilizer after harvesting
Yes
No
2.5. Application of pesticides and growth stimulants
a) Before budding
Half month
3 weeks
1 month
More than 1 month
b) When budding
Once a week
Once every two weeks
Once every three weeks
c) When blooming to harvesting
Spray as soon as blooming to harvesting (spray: days/a time)
Spray when flowers fading until harvesting (spray: days/a time)
d) Interval between the last day of application to the day of harvesting: days
2.6. Handling techniques for off-season dragon fruit
Electric lights
Mixture of nutrients
Both ways
2.7. Do you use pesticides?
Yes
No
2.8. Interval between the last day of application to the day of harvesting: days
3. Harvesting
3.1. Harvest time
Early morning
Late afternoon
Noon
Evening
3.2. After picking, fruits are
Put on the ground, not transported to the storage site immediately
transported to the storage site immediately
3.3. Harvest tools
Plastic basket
Bamboo basket
Other tools. Please specify:
3.4. Are fruits processed to remove fungi and preservatives before consumption?
Yes
No
C. Other questions
How long have you grown dragon fruit:
Cultivated area:
Expectations and suggestions when applying VietGAP standards:
Capital support
Technical support (seed, pest control…)
Infrastructure (transportation system, irrigation system, electricity system…)
Consumption information
Output guarantee
We highly appreciated your enthusiasm and cooperation!
APPENDIX B: SURVEY RESULTS AFTER PROCESSING BY MICROSOFT EXCEL
Total forms issued were 150. Total reponses were 142, in which 13 were invalid. Sample
size was 129.
(The criterias in italics are in accordance with VietGAP standards)
Techniques of choosing dragon fruit varieties
CriteriaNo. of
responses
Percentage
(%)
1. Dragon fruit varitety
Red skin, white flesh 89 70
Red skin, red flesh 40 30
2. Selecting budwood
Randomly selecy 0 -
Select healthy branches that never produce fruit 0 -
Select healthy branches that have produced fruit
1 – 2 times129 100
Select healthy branches that have produced fruit
more than 2 times0 -
Buy budwood from others 0 -
Cultivation techniques
CriteriaNo. of
responses
Percentage
(%)
1. Planting density
Under 2.5m x 2.5m 12 9
From 2.5m x 2.5m to 3m x 3m 93 72
Over 3m x 3m 24 19
2. Types of fertilizer applied
Compost 0 -
Inorganic fertilizer 0 -
Both types 129 100
3. Composting time
Less than 1 month 0 -
From 1 month to 2 months 0 -
From 2 months to 3 months 0 -
No self-composting in the garden 129 100
4. Frequency of fertilizer application
a) When making cuttings
Once a month 129 100
One per two months 0 -
Less than once per two month 0 -
b) When the plant climb to the top of the pillar to
budding
Once a month 129 100
One per two months - -
Less than once per two month - -
5. Application of pesticides and growth
stimulants
a) Before budding
Half month 104 81
3 weeks 25 19
1 month 0 -
More than 1 month 0 -
b) When budding
Once a week 129 100
Once every two weeks 0 -
Once every three weeks 0 -
6. Handling techniques of off-season dragon fruit
Electric lights 12 100
Mixture of nutrients
Both ways
7. Do you use pesticides
Yes 129 100
No 0 -
Harvesting techniques
CriteriaNo. of
responses
Percentage
(%)
1. Harvest time
Early morning 123 95
Late afternoon 6 5
Noon 0 -
Evening 0 -
2. After picking, fruit are
Put on the ground, not transpoted to storage sites
immediately48 37
Transpoted to storage sites immediately 81 63
3. Harvest tools
Plastic basket 129 100
Bamboo basket 0 -
Other tools 0 -
4. Are fruits processed to remove fungi and
preservatives before consumption?
Yes 0 -
No 129 100
APPENDIX C: QUESTIONARE FOR ENTERPRISES TO ASSESS THE REALITY OF
BINH THUAN DRAGON FRUIT EXPORT ACTIVITIES TO THE U.S MARKET
In the framework of our theis research project "Binh Thuan dragon fruit export to the U.S
market", we want to gather some facts relating to the practices of your business. The
information provided will be protected within the scope of the survey, used for research
purposes only and not legally binding. We would like to give you sincere thanks for
investing time in answering this questionnaire. We wish you a constantly prosperous
business and a new position in domestic as well as global market.
1. Company information:
Company name:
Address:
Telephone:
Website address (if any):
2. Have you exported dragon fruit to the U.S market?
Yes
Not yet but we intend to export to this market
Not yet and we do NOT intend to export to this market
3. How do you evaluate the importance of the following criteria/activities to the
enforcement of dragon fruit export to the U.S market?
(5: Very important/ 4: Important/ 3: Somewhat important/ 2: Somewhat unimportant/ 1:
Absolutely unimportant)
1 2 3 4 5
Building amd developing brand image of dragon
fruits
Attending specialized fair trades and exhibitions in
the U.S
Attending internation fair trades and exhibitions of
dragon fruit in Vietnam
Utilising online adversiting tools and methods
Applying of quality standards in the cultivation,
harvesting, preliminary processing.
Speed up human resources development
Sustain the capital
Enforcing the linkage between businesses
4. In recent years, how do you pay attention to the following issues in your export
practices of dragon fruit
(5: Very interested in and invested properly/ 4: Concerned but not invested significantly/
3: Interested but not yet invested/ 2: not much interested/ 1: not at all interested)
1 2 3 4 5
Building amd developing brand image of dragon
fruits
Attending specialized fair trades and exhibitions in
the U.S
Attending internation fair trades and exhibitions of
dragon fruit in Vietnam Attending internation fair
trades and exhibitions of dragon fruit in Vietnam
Utilising online adversiting tools
Applying of quality standards in the cultivation,
harvesting, preliminary processing
Enforcing the linkage between businesses in the
industry
5. How do you evaluate the current situation of the following criteria/activities
(5: Very good/ 4: Good/ 3: Fairly accepted/ 2: Poor / 1:Very poor)
1 2 3 4 5
The linkage between businesses in the industry
Purchasing activities
Government assistance in captital
6. Your perspectives about building Binh Thuan dragon fruit as national brand
Influence significantly, give businesses advantages to introduce and export dragon
fruit easier, safer and more convenient
Influence insignificantly. It is good to have but not very important
No need to build a national brand for this product. The most important is that
businesses have a strong brand and foothold in the market
Never heard of/concerned about this issue
Other opinions (Please specify:
)
THIS SECTION FOR ENTERPRISES EXPORTING DRAGON FRUIT TO THE U.S
MARKET ONLY
7. Since 2008, how often do you attend specialized fair trades and exhibitions in the
U.S:
More than 4 times/a year
2-4 times/a year
Once a year
Less than once a year
Not yet attended
8. Which distribution channels that you use when exporting dragon fruit to the
U.S:
Through importers in the U.S
Through export agents
Establish selling branches/representative offices in the U.S
Distribute directly to supermarkets and restaurants
Others (please specify: )
9. Mode of transport according to Incoterm that you apply when exporting dragon
fruit to the U.S:
FOB
CIF
FCA
Other (Please specify: )
THIS SECTION FOR ENTERPRISES NOT YET EXPORTING DRAGON FRUIT TO
THE U.S MARKET ONLY
10. Which are the reasons for not exporting dragon fruit to the U.S:
There can be multiple choise
Lack of market information
Afraid of legal/prolitical instability
Not enough supply to expand into this market
Not enough resources to advertise and promote export to this market
Unable to meet stringent requirements
Lack of capital
Others (please spcify: )
We highly appreciated your cooperation!
APPENDIX D: SURVEY RESULTS AFTER PROCESSING BY SPSS
Number of reponses: Total forms issued were 50. Total reponses were 48. There is no
invalid response.
1. Tình hình doanh nghiệp xuất khẩu thanh long sang Hoa Kỳ
No. of
response
Percentage
(%)
Yes 11 22,92
Not yet but we intend to export to this market 19 39,58
Not yet and we do NOT intend to export to this market 18 37,50
2. The importance of the following criteria/activities to the enforcement of dragon
fruit export to the U.S market by business evaluation
(5: Very important/ 4: Important/ 3: Somewhat important/ 2: Somewhat unimportant/ 1:
Absolutely unimportant)
2
(%)
3
(%)
4
(%)
5
(%)Mean
Building amd developing brand image of dragon
fruits- - - 100 5,00
Attending specialized fair trades and exhibitions
in the U.S- - 36,36 63,64 4,64
Attending internation fair trades and exhibitions
of dragon fruit in Vietnam- 18,18 36,36 45,46 4,27
Utilising online adversiting tools and methods - 45,46 27,27 27,27 3,82
Applying of quality standards in the cultivation,
harvesting, preliminary processing.- - - 100 5
Speed up human resources development - 27,27 72,73 - 3,73
Sustain the capital - - - 100 5
Enforcing the linkage between businesses - - 63,64 36,36 4,36
3. The level of interest of business exporting to the U.S in the following
criteria/activities
(5: Very interested in and invested properly/ 4: Concerned but not invested significantly/
3: Interested but not yet invested/ 2: not much interested/ 1: not at all interested)
2
(%)
3
(%)
4
(%)
5
(%)Mean
Building amd developing brand image of dragon
fruits- - 54,55 45,45 4,45
Attending specialized fair trades and exhibitions
in the U.S9,09 54,55 18,18 18,18 3,45
Attending internation fair trades and exhibitions
of dragon fruit in Vietnam- 27,28 36,36 36,36 4,09
Utilising online adversiting tools and methods 36,36 36,36 27,28 - 2,91
Applying of quality standards in the cultivation,
harvesting, preliminary processing.- - - 100 5
Speed up human resources development
Sustain the capital 9,09 27,27 45,45 18,19 3,73
Enforcing the linkage between businesses
4. The reality of the following criteria/activities of the industry by business
evaluation
(5: Very good/ 4: Good/ 3: Fairly accepted/ 2: Poor / 1:Very poor)
1
(%)
2
(%)
3
(%)
4
(%)Mean
The linkage between businesses in the industry10,42
64,5
825 - 2,15
Purchasing activities-
16,6
756,25 27,08 3,10
Government assistance in captital - 39,5 60,42 - 2,60
8
5. Perspectives of businesses about building Binh Thuan dragon fruit as national
brand
No. of
response
Percentage
(%)
Influence significantly, give businesses advantages to
introduce and export dragon fruit easier, safer and more
convenient.
18 37,50
Influence insignificantly. It is good to have but not very
important.14 29,17
No need to build a national brand for this product. The
most important is that businesses have a strong brand and
foothold in the market
0 -
Never heard of/concerned about this issue 16 33,33
Other opinions 0 -
THIS SECTION FOR ENTERPRISES EXPORTING DRAGON FRUIT TO THE U.S
MARKET ONLY
6. The frequency of attending specialized fair trades and exhibitions in the U.S
since 2008
Frequency No. of
response
Percentage
(%)
More than 4 times/a year 0 -
2-4 times/a year 3 27,27
Once a year 1 9.09
Less than once a year 2 18,18
Not yet attended 5 45,46
7. Distribution channels used to export dragon fruit to the U.S
No. of
response
Percentage
(%)
Through importers in the U.S 5 45,45
Through export agents 6 54,55
Establish selling branches/representative offices in the U.S 0 -
Distribute directly to supermarkets and restaurants 0 -
8. 11/11 businesses exporting dragon fruit to the U.S applied CIF mode of
transport, making up 100%
THIS SECTION FOR ENTERPRISES NOT YET EXPORTING DRAGON FRUIT TO
THE U.S MARKET ONLY
9. The reasons for not exporting dragon fruit to the U.S
Reasons
Businesses
with
exporting
intention
Businesses
without
exporting
intention
Total
Lack of market information No. 19 11 30
% 100 61,11 81,08
Afraid of legal/prolitical instabilityNo. 9 5 14
% 47,37 27,78 37,84
Not enough supply to expand into this
market
No. 7 14 21
% 36,84 77,78 56,76
Not enough resources to advertise and
promote export to this market
No. 6 0 6
% 31,58 - 16,22
Unable to meet stringent requirementsNo. 15 10 25
% 78,95 55,56 67,57
Lack of capitalNo. 19 18 37
% 100 100 100
OthersNo. 0 3 3
% - 16,67 81,08