FFTC Agricultural Policy Platform (FFTC-AP)

ABSTRACT

In Vietnam, the total production area of dragon fruit is approximately 50.000 ha with White Flesh variety accounting for about 95% and Red Flesh variety accounting for about 5%. Dragon fruit is mainly grown in Binh Thuan, Long An and Tien Giang provinces with more than 37.000 ha. The average yield is 22.7 tons/ha with the total annual production of nearly 700.000 tons. Fresh dragon fruit is used primarily for domestic consumption (15-20%) and for exportation (80-85%) to 40 countries and territories. In addition to traditional markets such as China, Thailand, Indonesia, Malaysia, the Netherlands and Taiwan, dragon fruit is exported to fastidious markets like USA, Italy, Japan and Singapore, and some new markets (India, New Zealand, Australia and Chile). In the first 8 months of 2016, China - the main export market of dragon fruits, accounting for 91.2% of total turnover - reached 518.1 million USD; USA - the second largest dragon fruit export market of Vietnam - reached 11.64 million USD, accounting for 2.1% of total turnover. Thailand became Vietnam's third largest dragon fruit export market with a turnover of US$1.09 million. However, dragon fruit production in Vietnam is facing many difficulties including: (i) The impact of climate change, diseases and insect pests, (ii) The price of inputs (fertilizers, pesticides) always tend to increase. This leads to the increase in the production cost and reduction in the competitiveness of dragon fruit both in the domestic and international markets, (iii) The price of dragon fruits is unstable and always depends on the cropping season and other market factors. The expansion to other markets meets high requirements mainly due to technical barriers, while the ability to meet quality standards, pre-processing technologies, preservation and long-distance transport in the dragon fruit production chain is slowly being improved, (iv) Major competitors in dragon fruit production such as China, Indonesia and Thailand are developing raw materials and penetrating bigger markets, especially in China and Indonesia. To develop the dragon fruit industry, the following solutions are necessary: diversification of products, organization of production, enhancing the effectiveness of pests and diseases management, development of diversity distribution channels, management of dragon fruit business, development of cooperation in dragon fruit production and procurement, and investment into processing of dragon fruit products.

Keywords: Dragon fruit, disease and insect pests, market, processing

DRAGON FRUIT PRODUTION AND CONSUMPTION IN VIETNAM

Most of the dragon fruit grown in Vietnam is Hylocereus undatus, with red or pink/white skin and White Flesh accounting for about 95%, the rest is Red Flesh accounting for about 5%. Dragon fruit planted in recent years has high yields that brings high income to the growers. It can now be available all year-around through an off-season production technology that mainly happens by manipulating the environment through artificial lighting lamps. The price of fruit from off-season is usually from US$0.15 to US$0.25 higher in comparison with that from the main-season, which is very favorable for export. The dragon fruit season is from April to October, the most from May to August. Many dragon fruit varieties are bred to increase productivity, quality and suitability of land and climate. As a result, dragon fruit become economically viable and have a high competitive advantage over other crops.

Dragon fruit is mainly marketed in the form of fresh fruit in which the domestic market accounts for 15 - 20% of the output; while the remaining 80 - 85% of the output is from exports.

Table 1. Growing area, yield and production of dragon fruit in Vietnam in the year 2015

Source: MARD, 2015

International market

Vietnam’s dragon fruit  is exported to 40 countries and territories such as China, Thailand, Indonesia, Malaysia, the Netherlands, Taiwan, USA, Italy, Japan, Singapore, India, New Zealand, Australia, Chile, etc. According to the statistic data, Vietnam exported about 900,000 tons of dragon fruit in 2015; in the first eight-months of the year 2016, dragon fruit export of Vietnam accounted for 49.8% of the total fruit export turnover, reaching US$567.88 million that up to 123% over the same period of the year 2015.

In the first 8 months of 2016: 

China - the main export market of dragon fruits, accounted for 91.2% of the total turnover, reached US$518.1 million, up 165.3% compared with 8 months of 2015.

US - the second largest dragon fruit export market of Vietnam, reached US$11.64 million in the first eight months of 2016 accounting for 2.1% of the total turnover, up 48.2% over the same period of 2015.

Notably, Thailand became Vietnam's third largest dragon fruit export market with a turnover of US$1.09 million, a surge of 73.3%. The first eight months of 2016 reached US$9.73 million accounting for 1.7% of the total (Table 2, Binh Thuan Dragon Fruit Association, 2016).

Table 2. Key export markets for dragon fruits in the first eight months of 2016 (Unit: thousand USD)

Source: MARD, 2015

DIFFICULTIES OF DRAGON FRUIT PRODUCTION IN VIETNAM

Production  

The brown spot disease (also known as white spot disease that caused by the fungus Neoscytalidium dimidiatum) (Nguyen and Quan, 2017) - infected area has recently decreased, but the risk of spread and outbreak of the disease is still high since there is no specific pesticides to control effectively the brown spot disease; the disease inoculum in the infected plant debris is still available in the field and there is no method for completely destroying the debris.

Although there were many enterprises and farmer organizations (such as the associated group, the cooperative group, the dragon fruit alliance) were established and went into operation; however, the associations have not formed effective links to promote sustainable production and consumption of dragon fruit in Vietnam. The dragon fruit growers sell products mainly through traders where they do not get good price, especially in main-season. Not being able to spread the crop in dragon fruit production to regulate the quantity of dragon fruits for consumption (Binh Thuan Dragon Fruit Association, 2016).  

Consumption and processing of dragon fruits

The domestic market has not been expanded, main export categories are low, export markets depend mainly on the Chinese market that will be high risk for dragon fruit production in Vietnam. The expansion of the export market is still limited. The volume of dragon fruits exported to China in the form of border trade accounts for a large proportion, but unregulated, the phenomenon of congestion and stagnation of goods at the border causes many risks for enterprises. Dragon fruit exports to the Chinese market in the form of cross-border trade do not require high quality, transport procedures, delivery and easy payment. The majority of dragon fruit exporters in Vietnam are medium and small scale with limited foreign trade knowledge, limited funds for trade promotion activities. In addition, the provincial budget for marketing and trade promotion for dragon fruit products has not been strong and has not meet the demand of the market.

CHALLENGING

From 2009 to 2010, brown spot disease has appeared in small areas in Binh Thuan province. Until 2012, the disease has re-emerged in Ham Thuan Nam and Ham Thuan Bac districts of Binh Thuan province and is now widely spread in the dragon fruit growing areas of the Binh Thuan, Long An and Tien Giang provinces causing great damage, high yield loss and reduction in quality and price of dragon fruit in the markets. At the end of 2012, the total infected area of Binh Thuan province reached to 827,5 ha and up to 1,393 ha in 2013 and 12,870 ha in 2014 accounting for about 50% of the total dragon fruit growing area of the province (VAAS, 2016).

In addition to brown spot disease, other disease and insect pests such as anthracnose, bacterial soft rot diseases, oriental fruit fly (Bactrocera dorsalis H.) and guava fruit fly (Bactrocera correcta B.) are also important pests of dragon fruit in Vietnam. From 2015, the root rot disease has occurred and severely damaged, serious threaten to dragon fruit production (Hien et al., 2011, 2016).

The main causes of the increase in the number and the incidence of pests are due to:

•  The high level of investments in intensive but unsustainable cultivation (use of many chemical fertilizers and less organic fertilizer);
•  The level of over-exploitation of fruit in both main-season and the off-season using electricity technology has led to the loss of resistance of plant;
•  Farmers are not interested in integrated pest management measures, especially pruning, removing and destroying of the infected debris, but rather focusing on using pesticides;
•  The inoculum of brown spot disease is existing in the field; however, farmers are not actively doing hygenic practices in their farms as recommended by the agricultural sector in the rainy season, this leads to the spread of diseases rapidly to new areas.
•  There are no biological products or specific pesticides for controlling of brown spot disease, and the efficacy of current chemical pesticides is low due to the smooth characteristics of dragon fruit that is very difficult for pesticides to stick on the surface of branches and fruits. The efficacy of pesticides is reduced especially in the rainy season. In addition, farmers use plant growth regulators that lead to the reduction of plant resistance against pests and decrease in product quality;
•  Vietnamese farmers produce dragon fruit spontaneously in small scale by traditional methods and beyond their experiences, using inappropriate pesticides; so that the quality does not meet the demand of the big international markets. Farmers sell their product to the traders which is  very risky for farmers especially in the "high yield but low price" situation;
•  The price of dragon fruits is unstable and always depends on the cropping season and other market factors. The expansion to other markets meets high requirements mainly due to technical barriers, while the ability to meet quality standards, pre-processing technologies, preservation and long-distance transport in the dragon fruit production chain is slowly being improved;
• The price of inputs (fertilizers, pesticides) always tend to increase. This leads to the increase in the production cost and reduction in the competitiveness of dragon fruit both in the domestic and international markets;
• Major competitors in dragon fruit production such as China, Indonesia and Thailand are developing raw materials and penetrating bigger markets, especially in China and Indonesia (Binh Thuan Dragon Fruit Association, 2016). 

     PROSPECTIVES

Diversification of products

In addition to the White Flesh variety, there are other varieties such as Red Flesh variety named LĐ1, Purple and Pink Flesh variety named LĐ5. Diversification of varieties will contribute to diversified products in the market while reducing competition pressure for traditional White Flesh variety. This is true especially for the LĐ5 variety which have the advantages of long-term preservation, good quality, beautiful appearance, high disease resistance that promis a new potential future for the dragon fruit production in Vietnam. In addition, this variety is being monopolized and will be highly competitive and not dependent on the import market.

Organization of production

• Strengthening the management of dragon fruit - growing area according to the approved plan; advise people not to develop new gorwing areas but focus on improving product quality and ensuring food safety;
• The production of dragon fruit must be oriented in accordance to GAP standards, with emphasis on quality not to follow quantity to ensure quality, food safety for export;
• To carry out synchronously from the production to processing stages under the provisions of the Law on Food Safety; absolutely no abuse of plant growth regulators and pesticide use on dragon fruit products.
• Link to form the production chain, the dragon fruit consumption on the basis creating the best conditions for enterprises to associate with the farmer organizations and strengthen cooperatives producing dragon fruit to improve the production capacity and link with the business (Binh Thuan Dragon Fruit Association, 2016).

Promoting trade activities  

Management of dragon fruit business, development of cooperation in dragon fruit production and procurement  

Investments into processing of dragon fruit products

To mobilize enterprises in the provinces who have financial capability, have markets and experience in the international markets to set up enterprises to invest in processing and export business to create new consumption capacity, contribute more actively into dragon fruit sustainable development (Binh Thuan Dragon Fruit Association, 2016).

REFERENCES

Binh Thuan Dragon Fruit Association. 2016. Report on the consumption status of dragon fruit in domestic and international markets (In Vietnamese).

Hien, N.T.T., L.D. Khanh and L.Q. Khai. 2011. Fruit fly species (Tephritidae: Diptera) and their hosts in dragon fruit production area of Binh Thuan province. Journal of Vietnamese Agricutural Science and Technology 9: 41-45.

Hien, N.T.T., L.D. Khanh, H.T.K. Lien, V.V. Thanh and V.T.T. Trang. 2016. Seasonal abundan of oriental fruit fly (Bactrocera dorsalis H.) and guava fruit fly (Bactrocera correcta B.) in Binh Thuan province. The 2^nd National Conference of Plant Science. Page 905-909 (In Vietnamese).

Nguyen, D.T. and M.V. Quan. 2017. Morphological and molecular identification of Neoscytalidium dimitatum causing white spot disease of pitaya (Hylocereus undatus) in Vietnam. Science and Technology Journal of Agriculture and Rural Development (In Vietnamese).

Vietnam Academy of Agricultural Sciences (VAAS). 2016. Report on the urgent measures for management of brown spot disease (Neoscytalidium dimidiatum) and other pests on dragon fruit. http://vaas.org.vn/ date of access: 8 March 2018.