Domestication: The cultivation of dragon fruits in Vietnam commenced in the early 1990s. Planting areas: focusing on some southern provinces such as Binh Thuan, Long An, Tien GiangCurrently, Vietnam is the largest exporter of dragon fruit to China; essential partner for several markets: US, Europe, Japan, Korea, etc.
VIETNAM'S DRAGON FRUIT TO JAPANESE MARKET APPLYING M.PORTER'S MODEL Presentation by group 10 - International Trade Policy Table of content 01 04 Overview of Vietnam’s dragon fruit export industry SWOT assessment of Vietnam’s dragon fruit exports to Japan 02 05 Analyzing the Japanese export market for dragon fruits Recommendations 03 06 Japanese barriers to trade for dragon fruits Minigame TEAM 10 01 OVERVIEW OF VIETNAM'S DRAGON FRUIT EXPORT INDUSTRY Foreign international trade MAY 2023 EMERGENCE AND GROWTH Domestication: The cultivation of dragon fruits in Vietnam commenced in the early 1990s Planting areas: focusing on some southern provinces such as Binh Thuan, Long An, Tien Giang EMERGENCE AND GROWTH In 2008: initial entry into the United States In 2018: formally exported to Europe Currently, Vietnam is the largest exporter of dragon fruit to China; essential partner for several markets: US, Europe, Japan, Korea, etc EXPORT TURNOVER 2010 2018 Vietnam's dragon fruit export value increased from more than 57 million USD in 2010 to more than 483 million USD in 2015 and about 1.1 billion USD in 2018 2019 2023 Vietnam's dragon fruit exports have decreased for three consecutive years since 2019 The largest dragon fruit export market is China, followed by other countries among which Japan ranks fourth Dragon fruit export turnover in the period of 2019 - 2022 (Million USD) 1,250 1,000 750 500 250 2019 2020 2021 2022 ANALYZING THE JAPANESE EXPORT MARKET FOR DRAGON FRUITS Preferences nutritious, fiber-rich fruit Export quantity 2,000 tons / each year Popularization sold exclusively in grocery stores Transportation by air freight or by sea Price 400-500 yen per fruit JAPANESE BARRIERS TO TRADE FOR DRAGON FRUITS Tariff methods implications Non-tariff methods implications Import licensing Technical barriers to Trade (TBT) Sanitary and Phytosanitary (SPS) Other barriers TARIFF METHODS IMPLICATIONS HS code: 0810.90.92 Export Tax: export tax rate as 0% (according to Circular No 164/2013/TT-BTC dated November 15, 2013) Value Added Tax (VAT): no VAT (Circular No 219/2013/TT-BTC dated December 31, 2013, and Decree No 209/2013/NĐ-CP dated December 18, 2013) Team 10 The four components Factor Conditions Demand Conditions Relevant auxiliary Industries Firm Strategy, Structure, and Rivalry Favorable weather conditions (basic strengths) Vietnam’s tropical climate The availability of agricultural land (basic strengths) The expansion of dragon fruit production (over 50,000 hectares ) Competitive labor costs (basic strengths) Agricultural production (basic strengths) Contributes to the costeffectivenes s of dragon fruit production The longstanding tradition of agricultural production Certifications achievement (high-level strengths) Technologica l application (high-level strengths) GlobalGAP, HACCP Ultrasonic applied to produce natural color from dragon fruit DEMAND CONDITIONS Japanese preference for dragon fruits Dragon fruit is popular with Japanese consumers due to its unique appearance and flavor Lacking in the target market output Dragon fruit in Japan is small, sour, and expensive RELEVANT AUXILIARY INDUSTRIES Fertilizer industry Vietnam has a well-developed fertilizer industry Plant protection medicine industry > 200 enterprises, nearly 100 factories, 30,000 agents of pesticides Engineering industry > 2,200 companies specializing in machinery manufacturing equipment Packaging industry more significant measures to enhance its packaging process, following Japanese requirements WEAKNESSES WEAKNESSES Infrastructure limitations Most agricultural inputs and plant protection drugs are imported from overseas Vietnam can only meet 30-40% of the demand for agricultural machinery, with the majority being imported from China and Japan Quality control measures The presence of counterfeit, fake, and smuggled products in the market poses a challenging issue in terms of management and usage Market access capability There are still significant limitations in the knowledge and understanding of market dynamics among businesses and individuals Opportunities FREE TRADE AGREEMENTS (FTAS) The Vietnam-Japan Free Trade Agreement (VJFTA) The ASEAN-Japan Comprehensive Economic Partnership Agreement (AJCEP), And recently, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) Under CPTPP, Japan cut down and eliminated tariffs on fruits and vegetables over a period of 4-15 years, starting from 2019 The CPTPP provides significant support to the Vietnamese government during the COVID-19 pandemic 01 Achievement of GI protection 02 Diminishing shipping costs 03 Price recovery post-pandemics THREATS Threats in cultivations: Excessive misuse of pesticides affects the quality of the harvest and violates Global G.A.P standards Production follows traditional farming practices Small-scale production due to misguided investments Limited utilization of modern production technologies, particularly in hydropower and irrigation systems Shortcomings in post-harvest preservation practices Threats in the target market: China and Thailand are increasing dragon fruit cultivation as a major export crop, Investment in variety research has not yielded significant results RECOMMENDATIONS MEASURES FOR FARMERS PRODUCT QUALITY IMPROVEMENT Lorem ipsum dolor sit amet, Implementing quality consectetur adipiscing elit Suspendissemeasures in mi sed velit lacinia control and vulputate Vestibulum dignissim Good Agricultural mollis ipsum sed pellentesque Practices (GAP) Investing in research and development Enhancing postharvest handling and packaging practices SUSTAINABLE AND ORGANIC FARMING PRACTICES Lorem ipsum dolor sit amet, Promoting consectetur adipiscing elit Suspendisse in mi sed velit sustainable andlacinia vulputate Vestibulum dignissim mollis organic farming ipsum sed pellentesque techniques Encouraging the use of natural fertilizers, pest control methods, and water conservation CAPACITY BUILDING AND TECHNICAL ASSISTANCE amet, Lorem ipsum dolor sit consectetur adipiscing elit Training and Suspendisse in mi sed velit lacinia knowledge of vulputate Vestibulum dignissim mollis ipsummarket sed pellentesque trends, quality standards, export requirements MEASURES FOR AGENCIES/ ENTERPRISES MARKET RESEARCH AND DEVELOPMENT Lorem ipsum dolor sit amet, consectetur adipiscing elit Conducting market Suspendisse in mi sed velit lacinia research vulputate Vestibulum dignissim mollis ipsum sed pellentesque Developing effective marketing strategies Establishing partnerships with international distributors, importers, and retailers INFRASTRUCTURE AND LOGISTICS ENHANCEMENT Lorem ipsum dolor sit amet,Lorem ipsum dolor sit amet, consectetur adipiscing elit.consectetur adipiscing elit Improving transportation Suspendisse in mi sed velit Suspendisse lacinia in mi sed velit lacinia vulputate Vestibulum dignissim vulputate mollisVestibulum dignissim mollis and logistics infrastructure ipsum sed pellentesque ipsum sed pellentesque Developing cold chain systems , storage facilities Strengthening packaging and labeling practices MEASURES FOR AGENCIES/ ENTERPRISES COLLABORATION AND NETWORKING sit amet, Lorem ipsum dolor consectetur adipiscing elit relevant Collaborating with Suspendisse in mi sed velit lacinia government agencies, trade vulputate Vestibulum dignissim mollis ipsum sed pellentesque associations Participating in industry-wide collaborations and knowledge sharing Engaging in technical assistance and capacitybuilding programs DIVERSIFY PRODUCT RANGE Lorem ipsum dolor sit amet, consectetur adipiscing elit Endeavor toinexplore myriad Suspendisse mi sed velit a lacinia vulputate.fruit Vestibulum dignissim mollis of dragon varieties ipsum sed pellentesque Cater assiduously to the heterogeneous proclivities of Japanese consumers Measures for the Government Trade Facilitation and Export Promotion: Streamlining export procedures and reducing trade barriers Participating in trade fairs and promotional events Advocating for favorable trade policies and supporting export initiatives Measures for the Government Government Support and Policy Initiatives: Providing financial incentives, subsidies, and grants to support farmers and exporters Creating a conducive business environment for dragon fruit exports Establishing mechanisms for market information dissemination, risk management, and access to finance THANK YOU