Sustainable growth of dragon fruit in Binh Thuan province: numerous challenges

Productive dragon fruit crops but low profits

The dragon fruit sector in Vietnam as well as Binh Thuan province has experienced stable growth over the last few years. However, the sector is expected to face numerous difficulties and challenges, especially in key export markets such as China. As a result, it is imperative that Vietnam comprehensively identify the strengths, weaknesses, opportunities, and threats within the dragon fruit sector. This will facilitate collaborative efforts among government officials, farmers, researchers, and businesses to address these challenges, find new outlets, and enhance the competitive advantage of Vietnamese dragon fruit products in the market.

The dragon fruit market traditionally flourishes during the Mid-Autumn Festival, with farmers preparing their products for sale at high prices. The price of dragon fruit in the 2023 Mid-Autumn Festival experienced significant increases, reaching 15,000 - 17,000 VND per kilogram for white-fleshed fruit and 19,000 - 22,000 VND per kilogram for red-fleshed fruit. However, despite the high selling prices, many dragon fruit farmers in Binh Thuan province find themselves with limited produce to sell.

Accordingly, many farming households within the province have refrained from investing in the care and cultivation of dragon fruit due to the risk of low prices and unstable market. One notable example include Mr. Trinh Chi Hieu's family in Minh Hoa village, Ham Minh commune, Ham Thuan Nam, who owns nearly 1,000 dragon fruit pillars. However, the family currently has no produce in stock to sell due to a lack of preparation. Similarly, Ms. Le Thi Thuy Linh, who is a member of the Phu Hoi Cooperative in Ham Thuan Bac, cultivates 3,000 VietGAP-compliant dragon fruit pillars. However, she has only recently begun the cultivation process with no produce in stock. According to Ms. Linh, due to the delayed end of the dragon fruit season and price fluctuations in 2023, farmers have shown little interest in cultivation.

Mr. Tran Quoc Thang, owner of an export-oriented dragon fruit purchasing company in Ham Thuan Nam, believes that the domestic dragon fruit market is currently thriving. Additionally, several international markets such as China, India, Thailand, Australia, and Japan show potential for importing Vietnamese dragon fruit. However, due to the low dragon fruit yield in Binh Thuan province, local businesses failed to acquire sufficient produce for export, leading to a sharp increase in dragon fruit prices.

According to the Binh Thuan province's Department of Agriculture and Rural Development, the province had approximately 27,790 hectares of dragon fruit production area by the end of 2022, which is an increase of nearly 40% compared to the 18,600 hectares in 2011. The production volume has also increased from nearly 400,000 tons per year to 594,000 tons per year. However, dragon fruit prices have fluctuated at low levels with limited consumption since 2021, adversely affecting the local dragon fruit production. Consequently, the majority of farmers have chosen not abandon their aged dragon fruit farms in favor of cultivating other crops.

Numerous Challenges and Difficulties

Dragon fruit has been identified as the flagship crop of Binh Thuan province, boasting significant economic value compared to other crops. However, the agricultural sector in the province has recognized several limitations in the local dragon fruit production. These issues include the small and fragmented scale of agricultural production, as well as the lack of large-scale production areas that can generate a sufficient quantity of competitive products.

Additionally, the preservation and processing of dragon fruit are underdeveloped, resulting in a low proportion of high-quality products and exportable brand names. Most importantly, unstable consumption, fluctuating prices, weak competitive capacity, and a limited variety of consumption markets pose significant challenges. On the other hand, the domestic market, particularly the northern region, offers significant potential for dragon fruit consumption. However, many businesses have elected to not expand domestically. Furthermore, the processing of dragon fruit in Binh Thuan province operates on a small scale with relatively low processing and preservation technologies.

According to the Department of Crop Production under theMinistry of Agriculture and Rural Development, the dragon fruit sector in Binh Thuan province lacks linkages, safe production, and quality certification. Namely, the VietGAP-certified dragon fruit area covers a total area of 8,610 hectares across the province, with 449 linked groups and 9,625 participating farmers. in addition to these challenges, pests and diseases such as the brown spot disease continue to affect local production, forcing farmers to resort to chemical pesticide. As a result, the local dragon fruit sector experienced an increase in production costs and food safety concerns. Moreover, the monitoring, inspection, assessment, and issuance of production unit and packaging facility codes remain inefficient.

Mr. Dang Phuc Nguyen, Secretary-General of the Vietnam Fruit and Vegetable Association, reported that dragon fruit has been the leading product in Vietnam's fruit and vegetable sector until July 2022. However, dragon fruit has officially exited the group of billion-dollar commodities in Vietnam since late 2022, and the possibility of its return is uncertain. One of the alarming reasons for this decline is China's  recent expansion of dragon fruit cultivation to 67,000 hectares. Accordingly, China expanded its dragon fruit production area with a focus on provinces bordering Vietnam including Yunnan, Guangxi, Guangdong, and Hainan. Consequently, Vietnam's export of dragon fruit to this market faces numerous challenges.

Moreover, logistical challenges encountered at the border gates in 2022 led to a decline in product quality and escalated logistics expenses, rendering the task of delivering Vietnamese dragon fruit to Chinese consumers more challenging.

"Farmers currently rely heavily on pesticide which surpass the stipulated limit, thereby failing to meet the food safety standards for exports. Moreover, current preservation technology for fresh dragon fruit is unable to achieve the mandated minimum shelf life of 60 days. Consequently, the export of dragon fruit using container ships to distant markets poses a formidable challenge. The predominant mode of transportation is air travel, which incurs substantial costs and hindering sales. Ultimately, gaining significant traction within the expansive Chinese domestic market proves to be a formidable task," highlighted Mr. Dang Phuc Nguyen.