practice of international trade analysis of lychee exporting

In 2021, Vietnam exported 89,300 tons of lychee that accountedfor 41.4% of total consumption despite facing the Covid-19 pandemic.. Every year,Vietnam has averaged about 50% of total lyc

TON DUC THANG UNIVERSITY

FACULTY OF BUSINESSADMINISTRATION

PRACTICE OF INTERNATIONAL TRADE

ANALYSIS OF LYCHEE EXPORTING

Lecturer: MBA Nguyen Thi Tuong Vy Class: Practice of international trade Group: 3

In order to successfully complete the report, along with the efforts andknowledge of the whole group, we would like to express our sincere thanks tolecturer MBA Nguyen Thi Tuong Vy for giving direct instruction and assistance to

us in implementing this report

Due to limited knowledge and time, there will be shortcomings in thereport We hope that you will share your knowledge and advice by makingcomment on this report so that our future report can be more complete

Thank you sincerely

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No Full name ID No Assignment Completion rate

Introduction 7

CHAPTER 1 Overview of lychee export in Vietnam 9

1.1 Lychee production in Vietnam 9

1.2 Export activity of lychee in Vietnam 10

1.2.1 Lychee export theory 10

1.2.2 Criteria of evaluating the quality of exported lychee 10

1.2.3 Lychee export policy in Vietnam 12

1.2.4 Supply and demand of Vietnam lychee 13

CHAPTER 2 Analysis of Vietnam lychee export activity 15

2.1 Process export lychee in Viet Nam 15

2.1.1 Overview process 15

2.1.2 Irradiation treatment 16

2.2 Procedure of exporting lychee in Vietnam 19

2.3 Vietnam export lychee price 22

2.3.1 Vietnam’s export lychee price and quantity 22

2.3.2 Factor affecting export price 24

2.3.3 The quality and categories of lychee export in Vietnam 31

2.3.4 Vietnam’s lychee export market 34

2.3.5 Vietnam’s export lychee competitors 36

2.4 SWOT analysis 37

2.4.1 Strength 37

2.4.2 Weakness 38

2.4.3 Opportunity 39

2.4.4 Threat 40

2.5 Exporting lychee sales contract 41

2.6 Custom clearance in Vietnam 44

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2.6.1 Time and time limit for customs clearance 442.6.2 Related responsibilities 452.6.3 The individual signed his / her signature on the Customs declaration winch 46CHAPTER 3 The solution of developing export activities 48Conclusion 51

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International trade activities have a great impact on the Vietnameseeconomy Nowadays, Vietnam is integrating into the world most strongly throughimport and export activities Vietnamese agricultural products are increasing theirvalue and position in the international market

Vietnam's lychee is currently being used by consumers and importcommercial enterprises as having the best quality in the world To achieve that,Vietnamese lychee must pass strict standards to be able to appear in supermarkets

in other countries In 2021, Vietnam exported 89,300 tons of lychee that accountedfor 41.4% of total consumption despite facing the Covid-19 pandemic Every year,Vietnam has averaged about 50% of total lychee output exported to nearly 30countries and territories around the world such as China, the US, EU, Canada,Australia Total revenue from lychee is estimated at 4,274 billion VND, revenuefrom ancillary activities and services is about 2,547 billion VND Despite beingaffected by adverse developments due to COVID-19, in 2021, lychee still retains itsquality, position in the international market, and brings a huge source of revenue

to our country

As mentioned, lychee brings a huge capacity both in terms of revenue andintegration of Vietnam into the world However, some problems limit its evolution.For example, logistics and supply chain processes have not been able to bring outthe full effect that they should have During the Covid-19 pandemic, supply chaindisruptions are becoming more and more frequent Specifically, according to TuoiTre newspaper, by December 2021, up to 4,300 container trucks were stuck at LangSon and Lao Cai border gates during the export of lychee to China Especially in theTan Thanh border gate area, trucks have the largest backlog with nearly 2,500trucks, mainly agricultural products Similarly, the procedures, processes, andconditions for exporting goods are increasingly difficult and have not been

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technology That has made the paperwork and censorship process take a lot oftime, leading to much damage to the lychee in the waiting time Therefore, manychallenges and difficulties have been created for the supply chain to operatesmoothly and smoothly This is the reason why our team decided to choose the

topic “Analysis Of Lychee Export Activities In Vietnam” for our report.

The report consists of 3 main parts:

Chapter 1: Overview of lychee export in Vietnam

Chapter 2: Analysis of Vietnam lychee export activity

Chapter 3: The solution of developing export activities

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1.1 Lychee production in Vietnam

Lychee is a very famous agricultural product in Vietnam Lychee originatesfrom South China and has appeared in Vietnam for a long time In 1942, a Frenchscientist discovered a wild lychee tree at the foot of Ba Vi mountain In 1970,Professor Vu Cong Hau and his colleagues discovered many lychee trees growingwild in Vinh Phuc and Quang Binh provinces To date, Bac Giang and Hai Duong arethe two localities that grow lychee and give the highest yield in our country

In the COVID-19 pandemic, trade activities were significantly limited.However, exporting lychee still followed an upward trend In 2020, the totaldomestic consumption of lychee will account for about 52.5% of the totalconsumption

Vietnamese lychee is rated as the best lychee in the world Every year,Vietnam has more than 50% of total lychees production exported to nearly 30countries and territories worldwide Lychees are grown mainly in some northernprovinces, especially Bac Giang, which is considered as the “capital of lychee” ofVietnam

For the export market, 47.5% of the total output, equivalent to 78,200 tons

of lychee Lychee is mainly exported to China and some EU countries, the US,Australia, Japan, South Korea, Singapore, Thailand, the Middle East, etc In which:The Chinese market is estimated at 77,300 tons, accounting for 98.8%; Theremaining markets are estimated at 900 tons, accounting for 1.2% of exportvolume

For Japan, Vietnamese lychee has a very high selling price, ranging fromVND 350,000 to VND 500,000 for 1 kg Despite the high price, the quantityconsumed is always in a state of out-of-stock As of June 4 2021, Bac Giang has

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exported up to 70 tons of lychee Not only in Japan but Vietnamese lychee alsoconquered an equally "fastidious" market, Singapore From now until the end ofthe lychee season, Singapore will consume at least 1 40-foot container every week.

It is expected the export volume can be up to 100 tons For China, this is a largefabric consumption market that Vietnam always wants to target As of June 2,

2021, over 9,000 tons of lychee have been exported to China On average, 1,000tons of lychee are exported every day According to Mr Tran Quang Tan (Director ofthe Department of Industry and Trade of Bac Giang province), Bac Giang isexpected to export about 47,000 tons of fresh fruit to the Chinese market.Besides familiar markets, Hai Duong lychee has been exported to a newmarket - Thailand in 2021 Recently, Ameii Vietnam Joint Stock Company exported

10 tons of fresh lychee to Thailand by sea Previously, this enterprise also exported

1 ton of fresh lychee to Thailand by air This is the first time Hai Duong lychee hasbeen exported to Thailand This can be considered as an opportunity for ourlychees to appear in other countries and expand international transactions

1.2 Export activity of lychee in Vietnam

1.2.1 Lychee export theory

Selling and transporting goods out of the Vietnamese territory or into aspecial area located on the territory of Vietnam for production and businessdevelopment is called export activities and currency is used as a payment method.This activity plays a crucial role in international business

Exporting lychee is the activity of selling and transporting lychee out ofVietnam territory to other countries in the world based on the process and law.Use currency as a payment method This process includes harvesting, sifting,sterilization, processing, packaging, irradiation

Exporting Lychee not only brings profits to businesses/individuals but alsocreates close relationships between countries Lychee is becoming a potential

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According to the exporter, the total value of six tons of lychee plus theshipping fee to the EU amounts to about EUR33,000 ($39,000) Fresh litchi andlongan from Vietnam have been exported to the EU by air The first shipment bysea, even at unusually high sea freight rates, is still cheaper than that by air.Businesses can sell one kilogram of lychee in the European market at a price ofone-third lower than the price of air-shipped lychee.

The price of lychee fluctuates within a certain range depending on which EUcountry lychees are sold in In France, wholesale price of lychee ranges from €2.5-3per kilo and €4-5 per kilo when retailing Meanwhile, in the UK market, lychee ispacked in bags or boxes of 300-400gr, with an average price of £5-7 per kilo Inaddition to fresh lychees, it is also processed into a variety of dishes, such as theadded ingredients in Halibut with cashews, the lychee served with miso salad, oradded to taste in an oyster salad mixed with coconut pulp

In Japan:

Previously, enterprises such as Ameii Vietnam Joint Stock Company and RedDragon Production Trading and Service Co., Ltd have prepared enough means oftransport to transport the first 100 tons of lychee to Japan Ms Ngo Thi Thu Hong,General Director of Ameii Vietnam Joint Stock Company, said: "In 2020, for the firsttime, Vietnamese lychee is exported to Japan and is highly appreciated for itsquality compared to other competitors Now, we expect lychee export volume toJapan to increase compared to last year and keep prices as high as in the first year."

In Japan, Vietnamese lychees are packed in a small box of 200gr and sold atprices spanning from VND 350,000-500,000 per kilo, which is 10 times higher thanthe price in the domestic market According to Mr Vu Hong Nam, AmbassadorExtraordinary and Plenipotentiary of Vietnam to Japan, it is difficult to growlychees in Japan because it is a temperate country The production of lycheesgrown here only accounts for 5% of the market share in Japan, so the lychee isconsidered a high-end product and sold at a very high price

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In Singapore, the price of lychee this year is higher than that last year Thepromotional price is VND 105,000 per kilo and it is expected to increase to VND120,000 per kilo in the following weeks

2.3.5 Vietnam’s export lychee competitors

No Competitors Category of lychee

1 Australia Fay Zee Siu, Taiso, Bengal, Waichee, Kwaimay pink,

Salaihiel

2 Taiwan Haakyjp, Shakeng

3 South Africa Taiso, bengal

4 USA Taiso, Kaimana

5 Thailand Taiso, Waichee, Baidum, Chacapat, Kom

6 China Fay Zee SÍU, bahlwp, no mai chee, Souey Tung, Talso,

Brewster

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2.4.1 Strength

Lychee productions are very fruitful thanks to the favorable weatherconditions and riverside terrain Vietnam has a diverse ecosystem, tropical climatewhich are suitable for developing farming areas Households are given differentcodes to cultivate lychee in accordance with two standards for agriculturalpractices globally

In Vietnam agriculture growth statistics, despite there was a considerabledecline compared with the September 2020 it had gone up to around 4.8% (3.5USD billion)

Bac Giang and Hai Duong are two of the key provinces in the production andexport of lychee to ensure the stable source of lychee and meet internationalstandards Under the guidance of local authorities, the lychee are well cultivatedand ensure to meet all standards such as Global Gap, VietGap Luc Ngan representsthe first Vietnamese product to be granted geographical indication certification inJapan, the product has previously successfully protected its trademark in China,Korea, Singapore, Australia and it is currently consumed in several countriesglobally At present, Luc Ngan district is home to more than 15.000 hectares oflychee, thus several large growing areas fall in line with global guide agriculturalpractices to produce high quality organic products that meets the various need ofdomestic consumption and exporting

The price of lychee was higher than other ones due to the good quality(food security and non-pesticide guaranty) when selling lyche to the foreignmarket, consumers love high standard, nice and big lychee

According to the Japanese, Vietnamese lychee has been highly appreciated

by consumers and businesses for their high quality Some enterprises report thatthe amount of Vietnamese lychee is outstanding and their customers look forward

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to having a taste again The price of each kilogram of Vietnamese lychee sold inJapan is ten times higher than the domestics retail price once they are accepted(Vietnamese lychee are packed in small box of 200 grams and have a promotionalprice of 430 yen), which means the value of lychee is increased, farmer able to selltheir products and their income will grow Not only in Asian market but also inParis and other regions It is expected that more lychee will reach Frenchconsumers, our product has been widely recognized (farmers, enterprises havemade lots of effort to improve quality and applied technology to meetinternational market standards) The ministry of industry and trade hasimplemented policies and orientations in diversifying export markets.

2.4.2 Weakness

For domestic consumption the price is lower, the domestic price varies a lot.The domestic consumers tend to prefer lower price and high quality products atthe same time, as for the agricultural products if traders offer a price that is littlehigher than usual consumers will not buy Nowadays Vietnam has attracted avariety of foreign enterprises so when they enter the market, our products have tocompete with their products which leads to the fact that consumers tend to buyproducts from other countries rather than domestic products because they haveadjust the price to a level at which anyone can afford, their quality are morereliable since they already had the reputation, as the results we are losing on ourown market

China is the dominant buyer of Vietnamese lychee in particular and otherproducts in general, most of the harvest is destined for China, when Chinesetraders have problems small-scale farmers and traders near the border suffer Insome cases, it has been pointed out that tons of lychee were left to rot due to thefact that Chinese buyers did not come So as the result, both farmers andorganization want to stop relying so much on this giant neighbor

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