Vietnamese Coconuts Near China Market Access, Sparking Thai Concerns Over Durian-Like Scenario

Fresh coconuts are set to soon become one of Vietnam’s next fruit items permissible for import into China. Negotiations on the phytosanitary protocol are already complete and the formal agreement is expected to be signed by the two sides shortly, as agreed during a recent meeting between representatives of the General Administration of Customs of China and the Ministry of Agriculture and Rural Development of Vietnam. Meanwhile, the GACC has released an updated list of fruit items eligible to be imported into China, which included coconuts from Vietnam alongside the remark “trial imports.”

Coconuts are mainly grown in the coastal provinces of central Vietnam and the Mekong Delta, with a total planted area of nearly 200,000 hectares and an annual production of approximately 2 million metric tons. Vietnam is the world’s seventh-largest producer of coconuts and exports the fruit to 90 countries and regions, with Europe, the United States, the Middle East, Japan and South Korea being the primary markets. In 2023, Vietnam’s exports of fresh coconuts and coconut-based products were worth $243 million.

Ben Tre province is Vietnam’s largest coconut production area, with over 72,000 hectares of coconut plantations. Tran Van Duc, president of one of the leading businesses in the province, Ben Tre Coconut Investment Joint Stock Company (Beinco), believes that the Chinese market has great potential. According to him, China consumes up to 2.6 billion fresh coconuts each year, with an additional 1.5 billion coconuts used for processing. China’s domestic coconut output can only cover 10% of this demand, with the remainder imported from other countries. As such, Vietnamese coconuts are expected to prove a commercial success in China owing to Vietnam’s geographical proximity and hence a short transit time, as well as lower production costs.

Duc revealed that several Chinese partners had already contacted him to inquire about the company’s production capabilities. Because Beinco has expertise in exporting fresh coconuts to high-end markets around the world, Duc is confident that his company can meet China’s raw product and packaging requirements. He added that once the formal agreement is signed, Vietnam could generate $300 million in revenue from the Chinese market and eventually catch up with Thailand.

Meanwhile, Thai media have reported that the upcoming need to compete with Vietnam on the Chinese market may lead to a potential upheaval for the country’s coconut milk sector. According to Narongsak Chuensuchon, managing director of NC Coconut Co. Ltd. and chairman of the Ratchaburi Provincial Industrial Council, Thai whole coconuts and coconut milk are highly sought after around the world. China is the industry’s primary market and purchases over 60% of Thai coconut-based products. In particular, bottled coconut milk exports to China bring in an annual revenue of 20 billion Thai baht ($578 million).

The unfavorable weather conditions recently witnessed in Thailand, such as high temperatures and drought, are one factor that may further heat up competition with Vietnam. A lack of supply has caused coconut prices in Thailand to reach a record high, with farm gate prices hitting 40 baht ($1.16), retail prices 70–90 baht ($2.02–2.60) and export prices 200 baht ($5.78) per piece. Some businesses have been reported to be exporting coconuts from outside the Ratchaburi geographical indication area, prompting criticism. The sweetness and overall flavor of those coconuts do not meet the geographical indication standard, which could negatively impact the international reputation of Thai coconuts.

In 2022, when fresh Vietnamese durians were granted China market access, export volumes rose rapidly. This caused the market share of Thai durians in China to drop drastically from 95% in 2022 to 65.1% in 2023. In the first half of this year, Vietnamese durian shipments to China gained further momentum, with exports reaching $1.32 billion, a 45% increase over the same period of last year. Chuensuchon warned that if Thailand does not maintain the quality of its fresh and processed coconuts, the industry risks losing significant market share to Vietnam, as in the case of durians.

Images: Pixabay

This article was based on a Chinese article. Read the original article.