Steep airfreight costs – up to 50 per cent of sales price – are restricting Vietnam's fruit exports.

The South East Asian nation hopes to export US$2bn worth of fresh fruit this year, but analysts doubt the goal is attainable due to high airfreight fees which make the product uncompetitive on some markets. Vuong Dinh Khoat, general director of HCM City-based Hugo Company, plans to ship longan and dragon fruits to the US, but said air transport costs 50 per cent of the sales price. Professor Nguyen Quoc Vuong, a lecturer and researcher at RMIT University in Australia, added that it cost US$2.95 to carry a kilo of lychees from Vietnam to Australia by air, which accounted for 42.2 per cent of the selling price.

A report by the Ministry of Industry and Trade (MOIT) showed that Vietnam’s fruit export turnover has been increasing steadily in the past few years from US$827m in 2012 to US$1bn in 2013 and US$1.477bn in 2014. Encouraged by the satisfactory growth rate, MOIT hopes the export turnover would be US$2bn this year. However, the goal is challenging, the report said.

Steep airfreight costs cut fruit exports - 1
A lot of countries have opened their markets to Vietnamese fresh fruits, however, high transport fees have made Vietnamese fruits less competitive in price in comparison with other exporters, it said.