Why do traders still compete to buy Thanh Chuong black star apple despite the risk of loss?
In recent years, Thanh Chuong black star fruit has had consecutive crop failures. Star fruit traders lose hundreds of millions of dong per crop but still compete to buy.
Loss of hundreds of millions of dong/crop
This year, Mr. Nguyen Van Hung (Thanh Linh commune, Thanh Chuong district) saved 400 million VND to trade in black canarium. Since March, when the canarium flowers bloomed, he traveled to Cat Van and Hanh Lam communes to deposit money to buy canarium.
“Buying canarium trees is based on experience and intuition to determine the price. For example, if I judge that this tree is in its prime, healthy, and has many flowers, it will yield high yields, and if it has many fruits, I will order it at a high price and vice versa,” he said.
According to Mr. Hung, buying canarium in this way is like a kind of “bet” because nothing is certain, it is full of luck. In years when the weather is favorable, the canarium trees bear fruit, there is a big profit, but on the contrary, in years when the harvest is bad, there is a failure. Like this year, he spent 400 million VND to buy canarium, but if he is lucky, he will only earn about 150 million VND, losing more than 200 million VND.
“I have to take the loss, so I can’t complain to anyone. This year, the canarium crop failed miserably, with productivity only 20% of previous years,” said Mr. Hung.
Like other traders, buying canarium fruit when it is in bloom is full of luck, in a good year you make a lot of profit, in a bad year you lose everything, Ms. Pham Phuong (Thanh Nho commune) considers it a compensation rule, doing business sometimes makes profit, sometimes makes loss is also a normal thing. However, after a dozen years of selling canarium fruit, this year, she considers herself "empty-handed". Having spent more than 300 million VND to buy canarium fruit when it is in bloom, now, after harvesting it all, if lucky, she can only recover about 50 million VND of capital, losing over 250 million VND.
This year, the canarium fruit crop was severely poor, due to the erratic weather. The canarium fruit was in bloom when it rained heavily, so the fruit set rate was not high. When the canarium fruit was young, many of them were lost due to whirlwinds. In addition, the old canarium trees were old and had passed the period of vigorous fruit production. The area of grafted canarium and hybrid canarium trees produced little fruit, and the fruit was of poor quality.
Why still buy at a loss?
Why do traders still compete to buy even though they are losing money? Why are canarium not like other agricultural products bought in the form of “cash on delivery”, “cash on delivery”, “cash on delivery”, when the canarium is ripe, harvested, weighed and paid? According to research, traders buying whole canarium trees when they have just bloomed has been going on for about 7-8 years now, when canarium prices are high and the market is in favor.
Thanh Chuong canarium fruit is famous for its delicious taste, so not only traders in the district and province but also in the northern provinces come to buy it. After being purchased, a part of the canarium fruit is sold to traders for retail sale as food; after being sold to processing facilities, a large amount is sold to the northern provinces, then they export it to China.
Market demand is high, while the amount of canarium in Thanh Chuong is limited, the area for new planting is still small. According to preliminary statistics, the whole Thanh Chuong district has about 1,000 ancient canarium trees; about 5,000 grafted canarium trees, the annual canarium output is estimated at about 350-400 tons.
Due to limited supply, there is a phenomenon of competition to buy. To ensure a source of goods, as soon as the canarium trees bloom, traders go to people's gardens to place orders.
Second, usually before the canarium season, the northern wholesalers have ordered canarium in specific quantities, if we do not order in advance, we will not be able to take the initiative in ordering; Third, buying the whole tree is buying at wholesale price, in a good harvest year, we will make a big profit to make up for a bad harvest year", Ms. Thuy, a famous canarium wholesaler in Thanh Chuong explained.
Many canarium orchard owners, when they saw that the canarium crop had a severe failure and productivity had decreased, shared with the traders in many ways. Some households returned part of the money to the traders (20-30% of the total amount the traders had paid); some households let the traders harvest another season next year without having to pay; some households chose to finish harvesting, weigh the actual quantity, and calculate the price according to the market price...
Lacknoriginal3-star OCOP salted plum processing materials
The poor harvest of canarium not only causes heavy losses for traders but also affects the input material source for the 3-star OCOP salted canarium processing factory in Thanh Chuong.
Accordingly, each year, with a processing capacity of 40 tons of black canarium, this processing factory purchases selected canarium from traders. Because it is an OCOP-starred product, processed, the requirements for input canarium materials are very strict: Canarium fruit must be ripe enough, completely black; weight must not exceed 110 fruits/kg, not rough, hard, or wormy; no impurities; no unripe fruit...
If in previous years, the canarium fruit harvest was good, the selection and purchase of raw materials for processing was quite favorable, but this year, the canarium fruit harvest was bad, the productivity and output were only about 15-20% compared to previous years, so the purchase of raw canarium fruit encountered many difficulties.
Mr. Le Van Khanh, representative of KHP Agriculture Joint Stock Company, the owner of 3-star OCOP salted black plum, said: “Although the purchase price is higher than the market price, the company still has difficulty in purchasing raw materials to ensure quality. Due to crop failure and high market demand, traders rush to harvest and sell the plums when they are not fully ripe. Meanwhile, to ensure the characteristic fat and richness of the plums, they need to be harvested when they are fully ripe. The increase in input material prices affects the cost of the product.”
Accordingly, to buy quality canarium, Mr. Khanh said, the purchase price must be increased, and the price must be negotiated with traders. If the canarium is left to "hang" until fully ripe, the price will increase.
Due to the lack of input materials, the production of 3-star OCOP salted black plum products has been interrupted. “The capacity of each batch (fruit of 1 tree) is 1 quintal, making about 10 batches (10 different trees) per day. However, there is not enough raw material, so when buying 20-30kg/tree, it must be processed because fresh plums left for a long time will affect the quality. The production is interrupted, divided into small pieces like this, affecting the operation of machinery, labor and quality control. This means increasing production costs,” Mr. Khanh shared.
