Vietnam’s coconut industry eyes billion-dollar markets

Vietnam ranks sixth among the top ten coconut-producing countries, with an annual output of nearly 2 million tonnes (Photo: VNA)

Ho Chi Minh City - Vietnam’s coconut industry has recently emerged as a key economic driver for the Mekong Delta and south-central coastal regions thanks to the signing of agreements for the product to enter billion-dollar markets such as the US, Europe, and China.

Strong resources, growing potential

According to the Ministry of Agriculture and Rural Development, Vietnam currently boasts over 200,000 hectares of coconut cultivation. Coconut is now one of the six key crops included in the national programme for industrial crop development by 2030. From generating 180 million USD in export revenue in 2010, coconut exports reached 900 million USD in 2023, and the sector is expected to surpass the billion-dollar mark in 2024. With this trajectory, the ministry aims to enhance the scale and quality of the coconut industry for further global expansion.

On the global map of coconut production and exports, Vietnam ranks sixth among the top ten coconut-producing countries, with an annual output of nearly 2 million tonnes. The country’s coconut quality and yield place it among the global leaders, with coconut meat making up 35% and coconut water 27%, both surpassing the global average by 5%. Dr Tran Thi My Hanh, from the Southern Horticultural Research Institute (SOFRI), highlighted these exceptional figures.

In terms of coconut cultivation, the Mekong Delta province of Ben Tre is the largest producer, with over 80,000 hectares dedicated to the crop. Huynh Quang Duc, Deputy Director of the Ben Tre Department of Agriculture and Rural Development, noted that the province is the coconut capital of the nation, accounting for 42% of Vietnam's total coconut area. Coconut farming is a vital source of income for over 200,000 rural households in the province. In recent years, many farmers have switched from less profitable rice farming to coconut cultivation, boosting incomes and providing a sustainable livelihood. Ben Tre’s coconut products are expected to generate 500 million USD in export revenue in 2024, contributing over 50% of the nation's total coconut export value.

The Chinese market is seen as a significant opportunity for Vietnamese coconuts. China, with its large population, has a high demand for coconut-based products, including fresh coconuts, coconut water, coconut oil, and processed coconut products. With its proximity to Vietnam, the country enjoys a competitive advantage in shipping costs compared to Southeast Asian and African competitors. Additionally, free trade agreements between ASEAN and China have facilitated easier access to this lucrative market. Vietnam’s large coconut production capacity, particularly from Ben Tre and the Mekong Delta, ensures a stable supply for China.

It is estimated that China consumes around 4 billion coconuts annually, with approximately 2.6 billion being fresh coconuts. Despite the high demand, China’s domestic production is insufficient, presenting an opportunity for Vietnam’s coconut exports to fill this gap.

Maximising the value of coconut

While the Vietnamese coconut sector has several advantages, experts in the coconut processing industry warn that strict management of production and exports is crucial to sustaining growth. Nguyen Phong Phu, Technical Director of Vina T&T Group, emphasised that the approval of Vietnam’s fresh coconut exports to China has opened up significant economic opportunities. However, to maintain this success, both government authorities and producers must work together to manage production standards and combat fraudulent practices. The government must implement digital systems for managing export regions and enforce strict penalties against fraudulent activities to protect the reputation of Vietnamese coconut products.

Coconuts offer high economic value not only through the export of fresh fruits to markets like the US, Australia, and China, but also through by-products such as coir, activated carbon, and coconut-based handicrafts. Nguyen Thi Kim Thanh, Chairwoman of the Vietnam Coconut Association, pointed out that of the 200,000 hectares of coconut plantations across the country, 120,000 hectares are dedicated to the processing industry. To increase coconut value, Vietnam must invest in quality coconut varieties while also focusing on maintaining a strong processing industry.

Currently, Vietnam is emerging as a supplier of raw coconut materials to global processing markets. However, infrastructure improvements are needed in rural coconut-growing areas to reduce intermediaries and shorten the supply chain. This would allow farmers to access the market more directly, enhancing their income and creating incentives to continue growing coconuts.

With these advantages, Vietnam’s coconut sector is proving its ability to deliver high value for producers and processors. The coconut is a versatile crop, where no part is wasted. Le Thanh Hoa, Deputy Director of the Department of Quality, Processing, and Market Development, added that the coconut has been included in the Ministry’s list of key industrial crops. Government policies to support the sector’s growth are in place, and local authorities must leverage these policies to further enhance production and export activities./.