Báo cáo Nghiên cứu khoa học Report on investigations into mango supply chains in the Mekong delta Vietnam 2005-2007

REPORT ON INVESTIGATIONS INTO MANGO SUPPLY CHAINS IN THE MEKONG DELTA VIETNAM 2005-2007 By Robert Nissen1, Tran Thi Ngoc Diep2, Nguyen Duy Duc2, Nguyen Minh Chau3, Nguyen Trinh Nhat Hang2, Tran Nguyen Lien Minh2, Tran Thi Kim Oanh2, M. Rankin4, I. Russel4 and Peter Hofman1 1 Queensland Department of Primary Industries and Fisheries (DPI&F) , Maroochy Research Station, PO Box 5083 SCMC, Queensland, Australia, 4560. 2 Southern Sub-Institute of Agricultural Engineering and Post-Harvest Technology (SIAEP), 54 Tran Khanh Du Street, District 1, Ho Chi Minh City, Vietnam. 3 Southern Fruit Research Institute (SOFRI), Long Dinh-Chau Thanh, P0 Box 203 My Tho Tien Giang, Vietnam. 4University of Queensland, Gatton College, School of Natural and Rural Systems Management, Gatton Campus, Lawes Queensland, 4343, Australia. 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AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 3 TABLE OF CONTENTS Background....................................................................................................................................................5 Introduction ....................................................................................................................................................5 Methodology ..................................................................................................................................................5 Survey of mango consumers in Ho Chi Minh City ..........................................................................................7 Introduction................................................................................................................................................7 Results.......................................................................................................................................................7 Demographics of Ho Chi Minh City .......................................................................................................7 Survey of Mango Retailers in Ho Chi Minh City (HCMC) .............................................................................23 Introduction..............................................................................................................................................23 Results.....................................................................................................................................................23 Retailers of Ho Chi Minh City. .............................................................................................................23 Retailer experience and length of time in the trade. ............................................................................23 Retailers purchasing patterns and locations........................................................................................24 Transport of product to retailer’s place of business .............................................................................24 Retailers’ delivery of product to consumers.........................................................................................25 Transaction types and methods of payment........................................................................................25 Retailer sales, quantity of mango sold in Ho Chi Minh City .................................................................25 The retailer wholesale purchasing price of mango in Ho Chi Minh City...............................................27 The retail sale price for mango in Ho Chi Minh City ............................................................................30 Factors contributing to fruit loss at the retail level................................................................................33 Preservation techniques and post-harvest technologies applied by retailers ......................................36 Difficulties and costs associate with running a retail business in Ho Chi Minh City, Vietnam ..............37 Labour requirements for retail shops at markets and fruit shops.........................................................37 Taxes and fees paid by retailers to operate their business..................................................................38 Information flows, exchanges and business fess paid by retailers to associations..............................38 Survey of Mango Wholesalers and Collectors .............................................................................................39 Ho Chi Minh City Fruit and Vegetable Central Markets ...........................................................................39 Wholesalers experience and length of time in the trade in South Vietnam..........................................39 Transportation practices......................................................................................................................40 Wholesaler purchasing practices.........................................................................................................42 Wholesaler mango purchasing prices .................................................................................................43 Quantity of mango sold by wholesalers...............................................................................................45 Wholesaler mango selling prices and profit .........................................................................................46 Wholesaler business operational expenses ........................................................................................48 Labour costs........................................................................................................................................49 Tax and electricity and water fees .......................................................................................................49 Wholesalers post-harvest handling techniques and practices .............................................................50 Fruit grading practices and quality assurance .....................................................................................54 Artificial ripening of fruit .......................................................................................................................54 Maturity level of fruit ............................................................................................................................55 Wholesalers supply chain communication practices ...........................................................................55 Collectors .....................................................................................................................................................57 Collectors’ purchasing practices..........................................................................................................57 Collectors’ suppliers ............................................................................................................................57 Transportation .....................................................................................................................................57 Collectors handling and quality assurance practices...........................................................................58 Fruit grading by collectors ...................................................................................................................58 Packaging ...........................................................................................................................................59 Storage................................................................................................................................................61 AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 4 Collectors’ sale price for mango ..........................................................................................................61 Survey of Mango Farmers in the Mekong Delta, Vietnam............................................................................63 Pre-Harvest .............................................................................................................................................63 Varieties ..............................................................................................................................................63 Production Area...................................................................................................................................63 Farm sizes...........................................................................................................................................64 Production Periods ..............................................................................................................................65 Orchards and production systems.......................................................................................................65 Orchard tree age .................................................................................................................................66 Canopy Management ..........................................................................................................................66 Yield ....................................................................................................................................................67 Yield manipulation ...............................................................................................................................69 Fertilizers and Irrigation.......................................................................................................................70 Pre-harvest pest and disease control methods ...................................................................................70 Infield diseases that directly affect on fruit...........................................................................................70 Infield pests that directly affect fruit quality ..........................................................................................73 Post-harvest ............................................................................................................................................78 Harvesting ...........................................................................................................................................78 Maturity indicators ...............................................................................................................................81 Fruit grading AND packing ..................................................................................................................82 Shelf life ..............................................................................................................................................86 Transport .............................................................................................................................................88 Sale of fruit ..........................................................................................................................................90 Farm gate prices received for mango fruit ...........................................................................................91 Farm fees and taxes............................................................................................................................92 Communication and information exchange .........................................................................................95 Farm profit from mango production..........................................................................................................98 Environmental sustainability issues in the Mekong Delta ......................................................................100 Soil Management ..............................................................................................................................101 Irrigation and Water Management Practices .....................................................................................101 Agricultural Chemical Usage .............................................................................................................102 Mango Processor:- Costal Fisheries Development Copporation (CONFIDEC) Mango Processing Factory ...................................................................................................................................................................106 Observations and recommendations for the mango processor ..................................................................107 Ho Chi Minh City, May 2006..............................................................................................................107 Mango ripening......................................................................................................................................107 Air movement ........................................................................................................................................107 Suggestions...........................................................................................................................................107 Other suggestions .............................................................................................................................108 Conclusions ...............................................................................................................................................109 Consumers ............................................................................................................................................109 Retailers ................................................................................................................................................109 Wholesalers/Collectors ..........................................................................................................................110 Farmers .................................................................................................................................................111 Cooperatives and groups ..................................................................................................................111 Supply chains ....................................................................................................................................111 References.................................................................................................................................................114 AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 5 BACKGROUND In the Mekong Delta, Vietnam, about 33 286 hectares of mango are grown, producing about 193 383 metric tonnes of fruit per year. Currently, over 80% of the mango production is from small individual village farms. Many farmers harvest immature fruit to reduce damage from fruit fly and poor handling systems along the supply chain. Many poor farmers do not have direct access to supermarkets due to food safety, quantity requirements, and delivery conditions. Many open wet markets in Asia lack the necessary hygiene facilities to meet the growing demand for safe products. Traditional markets and street vendors are the major participants in the food distribution lines in Vietnam. Supermarket numbers are increasing due to consumer demands for safe food and the Vietnamese Government promotion of ideals on safe food. As Vietnamese wages increase and consumers demand a safe product, the number of supermarkets has increased dramatically in Ho Chi Minh City between 1990 and 2004, at a rate of 17% per year. In Hanoi, supermarket expansion also occurred at a rate of 14% per year from 2000 to 2004. In 2004, there were 43 supermarkets and nine trade centres in Hanoi. In 2005, there were 71 supermarkets in Ho Chi Minh City (Moustier, et al 2006). Producers must be highly adaptable; inflexible producers will not be able to generate added value to the supply chain and will be forced out of their industry. Producers must adopt new supply chain strategies that will deliver value for money to their customers and ultimately the end consumer. INTRODUCTION This report provides baseline information on investigations undertaken as part of the Collaboration for Agriculture and Rural Development CARD Project 050/04VIE “Improvement of export and domestic markets for Vietnamese fruit through improved post-harvest and supply chain management”. This collaborative project is funded by AusAID and administered by Hassall and Associates International. The project is between the Queensland Department of Primary Industries and Fisheries (QDPI&F) and the Vietnamese organisations, Southern Sub-Institute of Agricultural Engineering and Post-Harvest Technology (SIAEP), and Southern Fruit Research Institute (SOFRI). The aim of this report is to investigate and understand mango supply chains in Mekong Delta, Vietnam by: • determining pre- and post-harvest technology practices of these supply chains • determining the quality of the product produced by these supply chains • identifying participants in the existing domestic and export supply chains • map the existing mango supply chains and their and distribution channels METHODOLOGY Several methods were used to collect baseline data on mango supply chains operating in the Mekong Delta of Vietnam. Relevant data and information was collected from the internet and reports produced by the Ministry of Agriculture and Rural Development (MARD), The Government Statistics Office (GSO) of Vietnam, and provincial government offices in the Mekong Delta, Vietnam. Further information was obtained from the internet and published reports and databases of the Food and Agricultural Organisation (FAO) of the United Nations and World Bank. Survey sheets and process analyses were developed and tested by Vietnamese project staff. This was part of the training conducted by the Australian collaborators for the CARD Project 050/04VIE. The supply chain was segmented into the various supply chain participant groups, consumers, wholesalers, collectors and farmers. A full investigation was carried out via interviews and surveys with the consumers, AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 6 wholesalers, collectors and farmers along the mango supply chains operating in the Tien Giang, Vinh Long, Dong Thap and Ben Tre Provinces and Ho Chi Minh City, Vietnam in July 2005 to May in 2006. Stratified random sampling and random sampling techniques were used to collect survey data. Interviews were conducted on a 100 consumers, 560 retailers, including 30 supermarkets, 46 high class shops, 397 retailer markets and 87 push cart and sidewalk shop vendors. Retailers were segmented into four groups, based on store classification type list. These classifications are: • Supermarkets are more than 250 m2 in size and selling both consumer goods and fruit and vegetable • High class fruit shops are retailers specalising in selling high quality fruit and vegetable only • Retail markets are fruit and vegetable retailers selling fruit and vegetable in a general market (traditional as well as wet markets retailers) • Push cart, sidewalk shops and travelling street vendors A stratified random sampling technique was used to select the retail businesses to interview. Numbers of retailers surveyed for each store classification type are presented in Table 1. Table 1. Retailer classification and number surveyed in Ho Chi Minh City. Classification Type Number surveyed Supermarkets 30 High Class Fruit shops 46 Retail Markets 397 Vendors (push-cart, sidewalk shops) 87 Total 560 Further investigations on mango sales during both the main mango season and off season were undertaken. A total of 98 retailers were interviewed during the main mango season and a further 100 retailers interviewed during the off season. A total of 8 wholesalers from the city of Cai Be, Tien Giang Province were interviewed and a further 10 collectors were interviewed in the Vinh Kim and Cai Be Districts. Interviews of 299 wholesalers were conducted, including the wholesale markets in Ho Chi Minh City, Ton That Thuyet floating markets (which no longer exist), Cho Lon, Thu Duc as well as wholesale markets in the production areas of Binh Thuan, Bin Duong, Ben Tre, Tien Giang and Don Thap. A further survey of wholesalers was also carried out in 2006 and an investigation of HCMC Fruit and Vegetable Central Markets was undertaken on the 29th of April 2006. A total of 64 farmers were interviewed within Cam Son district, with 34 new mango farmers and 30 established mango farmers. In Hoa Hung district, 24 surveys were conducted with established farmers. All farmers interviewed produce fruit for market in January to March period. A further 100 farmers were interviewed while they attended mango training courses at the Agricultural Extension Centre. Further information was obtained via interviews with 3 grower cooperatives/groups in November 2005 and April 2006. AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 7 SURVEY OF MANGO CONSUMERS IN HO CHI MINH CITY INTRODUCTION The retail and consumer scene, especially in Ho Chi Minh City, is undergoing a great deal of change that is beginning to benefit the end consumer. Not only have supermarkets and department stores grown in number, but many are already modernising their services and products, from better-designed shelves, promotions, to point-of-sale (POS) terminals to help boost sales and competitiveness. Fast moving consumer goods (FMCG) have experienced the highest growth rates, growing at a rate of 10% per year for the past four years (Vietnam Economy, 2007). Vietnam Economy (2007), reported growth rates for 2006 for FMCG are: • 18% for dairy products (milk) • 13% for personal care items (shampoo, facial moisture, skin care and beauty products) • 13% for non-alcoholic beverages (tea, fruit juice, etc) In contrast, the traditional markets and street vendors are the major sellers of fruit and vegetables in Vietnam. This is based on quantities sold, area of sales and employment (Moustier, 2006). These markets and vendors are the main point of sale to poor customers, who rarely purchase from supermarkets because of high prices and inconvenient locations. In Ho Chi Minh City, 33% of the poor households have never shopped in supermarkets and only 38.5% shop there regularly. This sharply contrasts with the figures for non-poor households in Ho Chi Minh City, where only 2% have never shopped in supermarkets and as many as 81.2% shop there regularly (Vietnam Economy, 2006). RESULTS DEMOGRAPHICS OF HO CHI MINH CITY POPULATION CHANGES The population of Ho Chi Minh City (HCMC) has been increasing at a rate of 3.5% per annum. Estimates now place the population to be over 7 million, of which migrants make up about a third. The city occupies approximately 2,000 square kilometres, but due to the urban development history, the city’s population density is not allocated equally. The population density in the inner city is over 30,000 persons per square kilometre, whereas the density in suburban and rural areas of the city is considerably lower. Ho Chi Minh City consists of 24 urban and rural districts (Figure 1), among which 13 are inner districts; 6 are newly established urban districts, and 5 are suburban districts (Thanh, 2007). See Table 2 for topology and characterisations of the districts of Ho Chi Minh City. AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 8 Figure 1. Administration map of Ho chi Minh City Table 2. Topology of districts in Ho Chi minh City, Vietnam Categories Rapid Urbanisation Medium Urbanisation Slow Urbanisation Total Urban Districts 1, 3, 4, 5, 6, 10, 11, Phu Nhuân 8, Bình Thanh, Gò Vấp, Tân Bình,Tân Phu 13 Semi-urban Districts 7,12, Bình Tân, Thu Duc 2, 9 6 Rural districts Cu Chi, Bình Chánh, Hóc Môn, Nhà Bè, Cân Gio 5 Total 13 4 7 24 Previous research into urban life claimed that rural poor people (migrants) who leave their villages to seek a livelihood in the cities fall into the urban poor class, and their prospects do not improve. Despite this, the rural poor, many of whom have lost their access to land and a livelihood, still view the city as a means to escape rural poverty. According to the 1999 general census of Ho Chi Minh City, the rate of female migration to the city is higher than that of men (Ho Chi Minh City Office of Statistics 2000). This was also higher than the number of female migrants moving to other areas in Vietnam. Nationally, women made up 45% of all migrants within Vietnam, but they accounted for 58% of all migrants moving into Ho Chi Minh City (Gubry et al. 2002). AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 9 Table 3. Occupation before and after migration to Ho Chi Minh City Occupation Before migration At present Agriculture 49% 0% Wage Labour 21% 18% Handicraft production 11% 22% Student 6% 0% Employee 1% 2% Small trading 10% 31% Petty trading 0% 27% Housewife 2% 0% Total 100% 100% EARNING CAPACITY AND INCOME LEVELS OF THE CITIZENS OF HO CHI MINH CITY Ho Chi Minh City is the largest and fastest developing city and has the highest per capita income in Vietnam, yet around 12% of its population was classified as poor in 2001. Although this rate is lower than any other city in Vietnam, the gap between the rich and poor is widest in HCMC. According to several social surveys, the majority of poor families still struggle to earn money. During the past 5 years in HCMC, only 25% of people have improved their situation while 50% have been worse off (Leonhardt, 2001). The Vietnamese Household Living Standards Survey (VHLSS) of 2002 estimated the total annual expenditure calculated on the basis of Purchasing Power Parity at approximately Int$ 5 510 (approximately 12 738 624 Vietnamese Dong (VND). The total annual expenditure per capita was Int$ 1 345 (approximately 3 109 518 VND) and the total annual food expenditure per capita at Int$ 581 (approximately 115 364 VND) with 11.4% on livestock foods (meat, eggs and milk) and 9.2% on fish and the remainder on agricultural products (Maltsoglou, 2007). Poverty affects food security of men and women differently in Vietnam. Women are more vulnerable to malnutrition because they eat less than men. Especially when pregnant, they need a high level of nutrient intake (Colwell et al., 2002). In addition, women take an active role in working and looking after the family and the custom of men eating first may contribute to malnutrition. Information on women and their earning capacity are presented below to provide a guide to the overall earning capacities of the poor in Ho Chi Minh City, Vietnam. Most of the women who migrated to Ho Chi Minh City for work, work in the informal sector and are poor. 60% said that they brought less than 100 000 VND ($US 1=14 000 VND), and more than 90% come to the city with less than 500 000 VND. Most of the women found work in petty trading or wage work, which required little to no money. While the capital needed to cover costs was relatively small, the average monthly amount earned by a female migrant worker from trade related activities was approximately 640 000 VND (Thai Thi Ngoc Du et al 2006). About 45% of these women earned over 600 000 VND a month. Within the various occupations, women engaging in petty trade earned a higher monthly income, grossing about 740 000 VND, and women who traded goods in the market place earned over 650 000 VND. Women undertaking handicraft production averaged over 600 000 VND per month and wage labourers received the lowest monthly salary of about 480 000 VND (Thai Thi Ngoc Du et al 2006). Some of these monthly incomes show that many women were not able to earn as much as they needed, as average monthly expenses for most women was more than 500 000 VND. Food costs came to approximately 345 000 VND, while rent and utilities were about 130 000 VND. Some women earn more than this and AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 10 spent the remainder on miscellaneous goods. Other women saved some of their earnings and sent it back to their families in the country areas (Thai Thi Ngoc Du et al 2006). Ben Thanh ward (District I), is a high-income area of Ho Chi Minh City, where many residents are business persons, officials and workers In contrast, most residents in the suburban Phu Thuan village (Nha Be District) are workers and farmers (Thanh, 2007). HOUSEHOLD CONSUMPTION Per capita consumption expenditure has grown dramatically in Vietnam since 1993, almost doubling by 2004. Urban areas have experienced faster growth. The richer have done better; most recently, however, it is the middle groups that have experienced the highest rates of growth. Households have increased their expenditure on all major categories, but mostly on education, which grew at 12 per cent per annum over the eleven year period (ADB, 2006). In 1998, expenditure on food consumption was, on average, 47% of the household budget (MARD, 2001). Rice consumption only varies slightly by income group, but above a certain income threshold, additional income is spent on high value food such as meat, fat, oil eggs and non food items (Oxfam 2001). The Asian Development Bank (ADB) project ‘Making Markets Work Better for The Poor’, categorised household expenditures into four categories: • Food • Education • Health • Housing. Food continues to account for the bulk of household expenditure today, but costs have grown at the lowest rate (2.19% p.a.). The amount spent on education grew the most over the 11 year period, at nearly 12% p.a., with the bulk of the increase occurring in 1993-1998. Expenditure on health grew only 4.5% p.a. over the 11-year period, but rose nearly 17% between 2002 and 2004. Housing expenditure grew nearly 7% over the whole period. (ADB, 2006). The share of food per capita in household expenditure fell from 62% of total expenditure in 1993, to 42% in 2004, while that of education increased from 3% to 5%. The share of housing remained virtually unchanged (around 7 %). The share of health dropped from 7.6% to 5.9% (ADB, 2006). Households in rural areas have lower expenditure levels and higher food budget shares compared to urban areas. As incomes increase, the discrepancies in expenditure levels between urban and rural households increases, while the food budget shares reduce. Urban households spend more on livestock products and consume 1.5 times the amount consumed by rural households. In the case of livestock products, both in rural and urban areas, the expenditure levels, the consumption levels per capita and the food budget share increase as income increases. The pattern is slightly different in the case of fish. In urban areas across different income levels, expenditure levels increase, shares reduce and quantities per capita is slightly reduce. In rural areas, expenditure levels, food expenditure shares and quantities consumed increase as income increases (Maltsoglou, 2007). SHOPPING BEHAVIOUR Consumers in Ho Chi Minh City who do not buy food and household items in supermarkets, cite prices, time and distance as their main reasons for not shopping there. According to the study, poor consumers generally have a positive opinion of their primary food outlets (which generally consist of formal markets, informal markets such as street vendors and shops). In particular, poor consumers have specific and opposing perceptions of supermarkets and street vendors: the former offer good quality but also require AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 11 high prices and time commitments, whereas the latter offer lower quality for cheaper prices and are more convenient in terms of time (Vietnam Economy, 2006). FOOD OUTLETS With increasing living standards over the last ten years, consumers have become more fastidious in choosing fruits. To service these consumers, fruit shops and supermarkets have opened to meet consumer demands. Supermarkets numbers have increased dramatically in Ho Chi Minh City. In 1990 there were no supermarkets in Ho Chi Minh City. Since then, supermarkets numbers have grown at a rate of 17% per year and in 2005, there were 71 supermarkets in Ho Chi Minh City. This increase in supermarkets is due to consumers’ demands for improved quality and food safety. Supermarkets and market stalls or shops are promoting their goods through improved presentation, packaging and product safety (Moustier et al, 2006). There are currently around 250 supermarkets throughout the 18 districts of Ho Chi Minh City. With large amounts of investment, a wide variety of household goods and large scale promotions, they have become strong rivals to smaller retailers. All are chasing the growing consumption power developing in Ho Chi Minh City’s new urban districts and suburbs (Vietnam Economy, 2007). CONSUMER PREFERENCES FOR MANGO VARIETIES The mango variety ‘Cat Hoa Loc’ was the most popular variety for the interviewees, with 71.43% of the consumers surveyed preferring to purchase and eat this variety due to its attractive color, flavor and perceived market prestige (Figure 2). The prestige aspect came about 10 years ago when ‘Cat Ho Loc’ was still rare and very expensive. Vietnamese consumers, consumption rates of mango varieties Percentage (%) of the total consumer surveyed 0 20 40 60 80 M an go v ar ie tie s Cat Hoa Loc Cat Chu Ghep Others (Thailand, Australia etc.) Figure 2. Percentage (%) of the total Vietnamese consumers surveyed and purchasing patters of mango varieties for Ho Chi Minh City, Vietnam AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 12 During the main production season, the price paid for ‘Cat Hoa Loc’ was reasonable and not too expensive for all income levels living in Ho Chi Minh City. This pricing level, offers low income workers the ability to purchase and consume this particular mango variety. Vietnamese consumers in Ho Chi Minh City purchase mango fruit for eating, gifts and for worship. Times of worship usually occur on the 1st and 15th day of the lunar month. Mango fruit sold in Ho Chi Minh City that originates from Thailand and Australia (variety R2E2) occupy only a small proportion of the market. This is because it cannot compete, quality- wise, with the local mango varieties ‘Cat Hoa Loc’ and ‘Cat Chu’. Most Vietnamese consumers are fiercely loyal to their local product and they will only purchase products from other countries when there is no local product available. Vietnamese consumers will purchase foreign fruit as gifts to signal a sign of great respect, wealth and prestige. CONSUMERS’ FREQUENCY OF PURCHASE, QUANTITY OF PURCHASES AND PLACE OF PURCHASE This survey found that about 76% of consumers purchase from one to three kg of fruit four to eight times per month (Figures 3 and 4). Therefore based on the data obtained in this survey, the average consumer in one year would purchase approximately 144 kg of mango. Most consumers surveyed purchased from the retail markets (Figure 5) due to perceived conveniences offered such as: • markets are easily accessible • ability to select individual fruit for purchase • familiarity or relationships that have been develop with retailers of mango. Quantity (kg) per purchase 3 kg P er ce nt ag e (% ) o f t he to ta l nu m be r s ur ve ye d 0 20 40 60 80 Figure 3. Quantity (kg) of mango purchased at one time by consumers in Ho Chi Minh City, Vietnam. AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 13 Frequency of purchases per month 8 Pe rc en ta ge (% 0 of th e to ta l n um be r s ur ve ye d 0 10 20 30 40 50 60 Figure 4. Monthly mango purchasing frequency for consumers in Ho Chi Minh City, Vietnam. Consumers preferences for place of purchase Percentage (%) of the total number surveyed 0 10 20 30 40 50 60 70 C on su m er s pl ac e or lo ca tio n of p ur ch as e Wholesale markets Retail markets Fruit shops Supermarkets Vendors Combination of the places Figure 5. Preferred place of purchase of mango for consumers in Ho Chi Minh City, Vietnam. AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 14 CONSIDERATIONS USED BY CONSUMERS WHEN PURCHASING MANGOES About 60.9% of consumers surveyed considered; ‘where did the mango they are about to purchase come from?’ (origin of production). The remaining 39.1% of survey respondents did not consider origin of production. About 69.5% of survey respondents purchased mangoes for prestige, with 22% purchasing due to habit and the remaining 8.5% through marketing (Figure 6). Purchasing habits Percentage (%) of the total number of consumers surveyed 0 20 40 60 80 100 R ea so ns fo r p ur ch as in g m an go es Prestige Habit Marketing Figure 6 Consumers’ reasons for purchasing mangoes in Ho Chi Minh City, Vietnam. PRICE PAID BY MANGO CONSUMERS IN HO CHI MINH CITY When asked to compare mango prices against their income, 70% of interviewees indicated that the purchase price was reasonable, including respondents from the poorer social classes in Vietnamese society. About 30% said the purchase prices were too high in comparison to their income, even during the main season, but especially at the beginning of the main season, when many consumers purchase mangoes to give as gifts. Less than one percent said the prices were too low and they mainly purchased fruit from high class shops (Figure 7). AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 15 Consumer ratings of mango prices Percentage (%) of the total number of consumers surveyed 0 20 40 60 80 C on su m er ra tin gs o f m an go p ric es in c om pa rs io n to th ei r w ag es High Average Low Figure 7. Consumers’ opinions of the cost of mangoes in relation to their income in Ho Chi Minh City, Vietnam. THE PURCHASE PRICE FOR MANGO IN HO CHI MINH CITY, VIETNAM The mango variety ‘Cat Hoa Loc’, in the market place in Ho Chi Minh City Vietnam receives on average a 50% higher price than the variety ‘Cat Chu’, and a 66% higher price than the mango variety ‘Ghep’. The average retail price per kg for the mango varieties ‘Cat Hoa Loc’, ‘Cat Chu’ and ‘Ghep’ did not fluctuate widely over the seasons from 2005 to 2006. The average retail price for mango variety ‘Cat Hoa Loc’, early and late main season and early and middle off season was between 15 000 and 20 000 VND per kg. During the middle main season, the average retail price fell below 15 000 VND per kg and for the late off season, the average retail price increased to about 20 000 to 25 000 VND per kg (Figure 8). The average retail price for the mango variety ‘Cat Chu’ for early and late main season and early and middle off season was between 14 000 and 18 000 VND per kg. During the middle main season, the average retail price fell below 15 000 VND per kg, and for late off season, the average retail price increased to about 20 000 to 25 000 VND per kg (Figure 9). The average retail price for the mango variety ‘Ghep’, was between 6 000 and 8 000 VND per kg for all seasons (Figure 10). AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 16 Early Off Season P er ce nt ag e (% ) o f t he to ta l co ns um er s su rv ey ed 0 10 20 30 40 50 60 Mid Off Season P er ce nt ag e (% ) o f t he to ta l co ns um er s su rv ey ed 0 10 20 30 40 50 60 Late Off Season Thousands ('000) of VND / kg 30 P er ce nt ag e (% ) o f t he to ta l co ns um er s su rv ey ed 0 10 20 30 40 50 60 Early Main Season P er ce nt ag e (% ) o f t he to ta l co ns um er s su rv ey ed 0 10 20 30 40 50 60 Mid Main Season P er ce nt ag e (% ) o f t he to ta l co ns um er s su rv ey ed 0 10 20 30 40 50 60 Late Main Season Thousands ('000) VND / kg 30 P er ce nt ag e (% ) o f t he to ta l co ns um er s su rv ey ed 0 10 20 30 40 50 60 Figure 8. Purchase price of mango variety ‘Cat Hoa Loc’ during the main and off seasons in Ho Chi Minh City, Vietnam. AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 17 Early Main Season Pe rc en ta ge (% ) o f t he to ta l co ns um er s su rv ey ed 0 10 20 30 40 50 60 Early Off Season Pe rc en ta ge (% ) o f t he to ta l co ns um er s su rv ey ed 0 10 20 30 40 50 60 Middle Main Season Pe rc en ta ge (% ) o f t he to ta l co ns um er s su rv ey ed 0 10 20 30 40 50 60 MIddle Off Season Pe rc en ta ge (% ) o f t he to ta l co ns um er s su rv ey ed 0 10 20 30 40 50 60 Late Main Season Thousands ('000) of VND / kg 18 Pe rc en ta ge (% ) o f t he to ta l co ns um er s su rv ey ed 0 10 20 30 40 50 60 Late Off Season Thousands ('000) of VND / kg 18 Pe rc en ta ge (% ) o f t he to ta l co ns um er s su rv ey ed 0 10 20 30 40 50 60 Figure 9. Purchase price of mango variety ‘Cat Chu’ during the main and off seasons in Ho Chi Minh City, Vietnam. AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 18 Early Main Season P er ce nt ag e (% ) o f t he to ta l co ns um er s su rv ey ed 0 20 40 60 80 100 Early Off Season P er ce nt ag e (% ) o f t he to ta l co ns um er s su rv ey ed 0 20 40 60 80 100 Middle Main Season P er ce nt ag e (% ) o f t he to ta l co ns um er s su rv ey ed 0 20 40 60 80 100 Middle Off Season P er ce nt ag e (% ) o f t he to ta l co ns um er s su rv ey ed 0 20 40 60 80 100 Late Main Season Thousands ('000) of VND / kg 10 P er ce nt ag e (% ) o f t he to ta l co ns um er s su rv ey ed 0 20 40 60 80 100 Late Off Season Thousands ('000) of VND / kg 10 P er ce nt ag e (% ) o f t he to ta l co ns um er s su rv ey ed 0 20 40 60 80 100 Figure 10. Purchase price of mango variety ‘Ghep’ during the main and off seasons in Ho Chi Minh City, Vietnam. AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 19 COMMON PROBLEMS THE CONSUMERS FACE WHEN PURCHASING MANGO About 51.7% of consumers surveyed indicated they had problems when selecting mangoes to purchase due to uneven ripening (Figure 11). Based on Australian varieties, mangoes are best ripened at about 20°C. This provides the best balance between good skin colour and flavour, whilst minimizing disease on the fruit. In relation to processing where skin colour is not an issue, we recommend ripening at about 24- 25°C. We know little about ripening conditions for Vietnamese varieties, but it is possible that higher ripening temperatures can be used. Uncontrolled temperatures of 26-35°C and inadequate air circulation and temperature control during the ripening process can have serious consequences in for mango fruit, causing: • uneven colouring occurring (green patches with a yellow background on skin of the mango) • uneven ripening of the flesh, and • the possibility of increasing disease presence, such as stem end rots and anthracnose Generally, temperatures above 32-35°C can prevent ripening. Therefore, temperature control during the ripening process is critical. Purchasing problems Percentage (%) of the total number of consumers surveyed 0 20 40 60 80 100 C on su m er s pr ob le m s w he n pu rc ha si ng m an go es Too much disease Non uniform size Overripe Non uniform ripening Figure 11. Problems encountered by consumers when choosing mangoes to purchase. CONSUMERS’ PREFERENCES FOR PURCHASING AND SELECTING MANGOES BASED ON THEIR QUALITY About 37% of consumers surveyed chose mangoes to purchase based on their colour, with overall fruit appearance ranking second at 21%, followed by size 20% and then flavour/smell 19.5%. Vietnamese consumers shop every day and therefore shelf life is not considered a major factor by consumers when making the initial purchase of mangoes (Figure 12). AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 20 Consumers preference for selecting mangoes Percentage (%) of the total number of consumers surveyed 0 10 20 30 40 C rit er ia c on su m er s us ed to s el ec t m an go es Colour Appearance Flavour (smell) Size Shelf life Figure 12. Consumers’ preferences for selecting mangoes to purchase in Ho Chi Minh City, Vietnam. CONSUMER REQUIREMENTS ON THE QUALITY OF MANGOES The mango variety ‘Cat Hoa Loc’ was the most popular variety of mango. Many consumers, when questioned about their preference for quality requirements of mangoes, indicated that quality should be improved in terns of being sweeter, have a smaller seed, have more fragrance and have a longer shelf life. About 85% of consumers surveyed indicated that fruit size was suitable, 60% indicated that colour was suitable with 24.8% indicating it should be yellower and 14.4% indicating that there is too much sap on the skin and in the fruit. About 71% of consumers surveyed indicated that flesh was suitable, 14% indicating that the seed was too large. About 63% indicated that the flavour was suitable, but 18% indicating that the fruit was not sweet enough and a further 18% indicating that the smell could be improved. About 71% indicated that shelf life was suitable with 18.8% indicating that the fruit rotted too quickly and 13% saying that the skin shriveled/withered quickly (Figure 13). AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 21 Fruit colour P ro bl em s w ith fr ui t c ol ou r Suitable Should be yellower Less sap in the fruit Fruit flesh P ro bl em s w ith fl es h Suitable Too much fiber Too much water Large seed Fruit size P ro bl em s w ith fr ut s iz e Suitable Too large Too small Fruit flavour P ro bl em s w ith fl av ou r Suitable Not sweet enough Do not smell good Shelf life Percentage (%) of the total number of consumers surveyed 0 20 40 60 80 P ro bl em s w ith s he lf lif e Suitable Rot to quickly Skin withered quickly Figure 13. Consumer ratings of mango fruit quality. AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 22 CONSUMER SUGGESTIONS TO IMPROVE MANGO MARKETING About 60% of consumers surveyed indicated that mango fruit quality is the single most important marketing factor that could be improved to increase mango sales. The next factor indicated by consumers was the distribution system at 16%, closely followed by packaging (12%) and the remaining 12% had no suggestions on how to improve the marketing and sales of mangoes in Ho Chi Minh City, Vietnam (Figure 14). Consumer suggestions for improvements in the marketing mangoes Percentage (%) of the total number of consumers surveyed 0 20 40 60 80 100 C on su m er s ug ge st io ns The quality The package Distribution system Other (No idea) Figure 14. Aspects of mango marketing and sales that consumers believe should be improved upon. AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 23 SURVEY OF MANGO RETAILERS IN HO CHI MINH CITY (HCMC) INTRODUCTION Supermarkets and department stores grown in number in HCMC, many are already modernising their services and products, from better-designed shelves, promotions, to point-of-sale (POS) terminals to help boost sales and competitiveness. Supermarkets are also responding to consumers’ demands for improved quality and food safety for fruit and vegetable products. Between 1990 and 2004 In Ho Chi Minh City, the number of supermarkets has increased at 17% per year. In 2005 there were 71 supermarkets in Ho Chi Minh City. This demand has seen the rise of supermarkets and market stall or shops that promote their goods via improved presentation, packaging and product safety (Moustier et al, 2006). RESULTS RETAILERS OF HO CHI MINH CITY. We found that in Southern Vietnam, there are three main mango varieties sold by retailers and vendors - ‘Cat Hoa Loc’, ‘Cat Chu’ and ‘Ghep’. Many vendors also sell green mangoes. These are sold intensively near factories, schools, and hospitals. Mango sellers reported that ‘Cat Hoa Loc’ was the most profitable mango to sell due to its marketability. Consumers regard this mango a having prestige and it is highly sought after. ‘Cat Hoa Loc’ mango was mainly sold by retailers with high quality fruit shops not associated with retail markets, and high quality fruit shops located in retail markets and supermarkets. Retailer ratings on the most profitable mango cultivars are shown in Table 4 below. Table 4. The most profitable mango varieties to market in Ho Chi Minh City as chosen by retailers. I. Mango Varieties Supermarkets Fruit shops Retail markets Vendors 1. ‘Cat Hoa Loc’ X X X 2. ‘Cat Chu’ X 3. ‘Ghep’ X X RETAILER EXPERIENCE AND LENGTH OF TIME IN THE TRADE. All surveyed retailers in Ho Chi Minh reported that consumers are becoming more fastidious in choosing fruit. This change can be attributed to the increase in living standards over the past ten years. All street vendors surveyed see their particular line of business as a temporary job. Most vendors have been in this line of business for only two to three years compared to market retailers, fruit shops and supermarkets, which have been in their line of business for 5 years or longer (Table 5). Table 5. Proportion of retailers and time spent in the trade. Classification Trade time (years) Percentage (%) vendors/the fruits shops < 5 years 23.5 supermarkets, retail markets and fruit shops 5 - 15 years 50.6 retail markets 15 - 30 years 8.23 retail markets > 30 years 17.67 AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 24 RETAILERS PURCHASING PATTERNS AND LOCATIONS About 93% of retailers surveyed purchase their fruit from the Ho Chi Minh City wholesale markets. Most high class fruit shops, supermarkets and senior retailers at the retail markets purchase fruit directly from collectors or growers in the various provinces in the Mekong Delta or other regions in Vietnam. When questioned about difficulties experienced in obtaining fruit, retailers indicated that: • 45% indicted that wholesalers did not follow the verbal agreement in term of the price, the quantity and product quality • 15% indicated that fruit size was not uniform as agreed When the old wholesale markets were moved from Cau Muoi Market, District 1, Ho Chi Minh City to Thu Duc Markets, 15 km from the city centre, some retailers had to break long standing relationships with Cau Muoi Market wholesalers and develop new relationships with new wholesalers at Thu Duc Markets and obtain mango fruit from Pham Van Thuong (District 5) or Ton That Thuyet (District 4). In 2006, the Ton That Thuyet floating markets on the Kinh Te River closed and moved to Binh Dien Markets wholesale markets in Binh Chanh District, or other floating markets in District 5 and District 6 in Ho Chi Minh City. TRANSPORT OF PRODUCT TO RETAILER’S PLACE OF BUSINESS With the Thu Duc Markets being 15 km from the city centre, 10% of retailers highlighted difficulties and problems with distance from wholesale markets to their place of business (Figure 15). Time taken to go to the markets and transportation of fruit from the markets back to their business establishments was longer and transportation fees were considerably higher compared to conducting business at the old wholesale markets. About 25% of retailers, mainly the vendors, complained about their transportation means (Figure 15). 45% 15% 10% 25% 5% Break the agreement in terms of the price, the quality and the quantity Not uniform in size The distance The transportation No idea Figure 15. Occurrence of problems faced by retailers when purchasing fruit. Practically all fruit purchased by the retailers are transported from the wholesale market place to the retailer’s place of business by Honda tricycles with or with out an engine. In some instances, small vans are used to deliver mangoes in cartons or boxes. Street vendors use push carts or bicycles to transport their fruit. Where tricycles are used, transportation fees are calculated according to the trip distance. Where vans are used to transport fruit in boxes, costs are calculated on a box basis and trip distance. AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 25 When purchasing mangoes, the retailer does not negotiate the transportation fee back to their place of business. They do not pay for each delivery, instead transportation fees are usually negotiated between the retailers and wholesalers, based on the annual quantity of fruit sales. Retailer survey results on costs are shown in Table 6. Table 6. Percentage of the total retailers surveyed and transportation fees paid per annum. Transportation fees in VND per year Percentage (%) of the total number of retailers surveyed < 500 000 VND per year 50% 500 000 to 1 000 000 VND per year 40% 1 000 000 to 2 000 000 VND per year 10% RETAILERS’ DELIVERY OF PRODUCT TO CONSUMERS Vendors use bicycle or bamboo shoulder carry baskets to peddle and move their fruit along the paths of Ho Chi Minh City. All retailers sell mango directly to customers who visit or frequent their establishments. Fruit sold by retailers are placed in plastic bags or wrapped in paper. The customer is responsible for transporting his or her purchase back to their households. Specialty fruit shops deliver mango sales to restaurants and hotels if the quantity sold exceeds 5-10 kg per delivery. TRANSACTION TYPES AND METHODS OF PAYMENT All contracts between retailers and wholesalers are verbal in terms of type of fruit purchased, price per kilogram or per fruit, and quality. When retailers receive the goods, 85% of the total payment cost is handed over to the wholesaler, the remaining 15% is to be paid by a set time period agreed to by the wholesaler and retailer. RETAILER SALES, QUANTITY OF MANGO SOLD IN HO CHI MINH CITY All retailers surveyed reported that they only sell to fruit to consumers in the Ho Chi Minh City area. No fruit are on sold to other retailers or vendors in other areas or regions of Vietnam. During the main mango season, 40% of mango retailers sell 1 000 – 2 000 kg per year, 29.5% sell 2 000 – 3 000 kg per year, 22.5% sell 500 – 1 000 kg per year, and the remaining 8% of retailers sell less than 500 kg of mango per year (Figure 16). AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 26 Main season Quantity (kg/year) <500 500-1,000 1,000-2,000 2,000-3,000 Pe rc en ta ge (% ) o f t he to ta l nu m be r m an go s el le rs s ur ve ye d 0 10 20 30 40 50 60 Figure 16. Quantity of mangoes sold per year in the main season by retailers, supermarkets and vendors in Ho Chi Minh City. In the off-season, 19.5% of mango retailers sell less than 500 kg per year, 48.7% sell 500 -1 000 kg per year, 19.5% sell 1 000 to 2 000 kg per year, and the remaining 12.2 % sell 2 000 – 3 000 kg of mangoes per year (Figure 17). This survey also found that experienced mango retailers (trading for over 30 years) consistently sell between 2 000 – 3 000 kg of mangoes per year. Off season Quantity (kg/year) <500 500-1,000 1,000-2,000 2,000-3,000 P er ce nt ag e (% ) o f t he to ta l nu m be r o f m an go s el le rs s ur ve ye d 0 20 40 60 Figure 17. Quantity of mangos sold per year in the off season by retailers, supermarkets and vendors in Ho Chi Minh City. The average number of mango sellers decreased by 58.1% between the main and off season. There is a 41.2% decrease in retailers selling 2 000 - 3 000 kg per year and 49.0% less retailers selling 1 000 to 2 000 AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 27 kg per year. In contrast the number of mango retailers who sell between 500 to 1 000 kg of mango per year increased by 46% in the off-season and the amount of mango retailers who sell less than 500 kg of mango per year increased by 41.8% (Figure 18). Percentage change in mango sellers between main and off seasson Quantity (kg/year) <500 500-1,000 1,000-2,000 2,000-3,000 Pe rc en ta ge (% ) d ec re as e in th e nu m be r of m an go s el le rs b et w ee n th e m ai n an d of f s ea so ns -60 -40 -20 0 20 40 60 Figure 18. Percentage change in number of mango retailers, supermarkets and vendors via sales volumes in Ho Chi Minh City from the main season to the off-season. THE RETAILER WHOLESALE PURCHASING PRICE OF MANGO IN HO CHI MINH CITY Survey results showed that most retailers purchase mangoes of various size and quality in 35kg bamboo baskets. Retailers purchasing the mango variety ‘Cat Hoa Loc’ paid an average price of 10 000 VND per kg during the main mango season and 25 000 VND per kg during the off season (Figures 19 and 20). For the mango variety ‘Cat Chu’, retailers paid an average price of 8 000 VND per kg during the main season and 15 000 VND per kg during the off season (Figures 21 and 22). For the mango cultivar ‘Ghep’, which is readily available in the market for most of the year, retailers paid from 2 500 VND per kg to 8 000 VND per kg (Figure 23). AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 28 Main Season (Mango cultivar 'Cat Hoa Loc') Thousands ('000) of VND / kg 30 P er ce nt ag e (% ) o f t he to ta l n um be r o f r et al ie rs s ur ve ye d 0 10 20 30 40 Figure 19. Retailer purchasing price during the main season of the mango cultivar ‘‘Cat Hoa Loc’’ in Ho Chi Minh City, Vietnam Off Season (Mango Cultivar 'Cat Hoa Loc') Thousands ('000) VND / kg 30 Pe rc en ta ge (% ) o f t he to ta l nu m be r o f r et al ie rs s ur ve ye d 0 10 20 30 40 Figure 20. Retailer purchasing price during the off season of the mango cultivar ‘‘Cat Hoa Loc’’ in Ho Chi Minh City, Vietnam AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 29 Main Season (Mango cultivar 'Cat Chu') Thousands ('000) VND / kg 30 P er ce nt ag e (% ) o f t he to ta l nu m be r o f r et ai le rs s ur ve ye d 0 10 20 30 40 50 Figure 21. Retailer purchasing price during the main season of the mango cultivar ‘Cat Chu’ in Ho Chi Minh City, Vietnam Off Season (Mango Cultivar 'Cat Chu') Thousands ('000) VND / kg 30 P er ce nt ag e (% ) o f t he to ta l nu m be r o f r et ai le rs s ur ve ye d 0 10 20 30 40 50 Figure 22. Retailer purchasing price during the off season of the mango cultivar ‘Cat Chu’ in Ho Chi Minh City, Vietnam AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 30 Mango cultivar 'Xoai Ghep' Thousands ('000) VND / kg 30 Pe rc en ta ge (% ) o f t he to ta l nu m be r o f r et ai le rs s ur ve ye d 0 10 20 30 40 50 60 Figure 23. Retailer purchasing price of the mango cultivar ‘Ghep’ in Ho Chi Minh City, Vietnam THE RETAIL SALE PRICE FOR MANGO IN HO CHI MINH CITY The average retail sale price of mango varies according to the type of retailer. About 85% of retailers surveyed felt that fluctuating prices are the most difficult aspects to deal with when selling mangoes. This was particularly evident when there is an abundance of other fruits available and competition was high. The second highest ranking difficulty retailers faced was time of season/year. At the end of the mango season, consumers become bored with mangoes and turn to other types of fruit. The survey found that vendors sold mangoes for 10 000 VND per kg in the main season, did not sell mangoes in the off season due to the high prices and lack of supply. The price of mangoes at the retail markets in the main season was 15 000 to 20 000 VND per kg, and in the off-season 30 000 to 35 000 VND per kg for all varieties. At times, retail market prices reach 40 000 to 50 000 VND per kg, mainly during the off season. In fruit shops, main season mangoes sold for 25 000 to 30 000 VND per kg, and in the off season, fruit sold for 40 000 to 45 000 VND per kg (Figures 24, 25, 26, 27 and 28). Sometimes fruit are sold for as high as 65 000 VND per kg during the off season. AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 31 Main Season (Mango variety 'Cat Ho Loc') Thousands ('000) VND / kg 30 Pe rc en ta ge (% ) o f t he to ta l nu m be r o f m an go re ta lie rs s ur ve ye d 0 10 20 30 40 50 Figure 24. Retailer selling price during the main season of the mango cultivar ‘‘Cat Hoa Loc’’ in Ho Chi Minh City, Vietnam Off Season (Mango variety 'Cat Ho Loc') Thousands ('000) VND / kg 30 Pe rc en ta ge (% ) o f t he to ta l nu m be r o f m an go re ta lie rs s ur ve ye d 0 10 20 30 40 50 Figure 25. Retailer selling price during the off season of the mango cultivar ‘‘Cat Hoa Loc’’ in Ho Chi Minh City, Vietnam AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 32 Main Season (Mango variety "Cat Chu') Thousands ('000) VND / kg 30 Pe rc en ta ge (% ) o f t he to ta l nu m be r o f m an go re ta lie rs s ur ve ye d 0 10 20 30 40 50 Figure 26. Retailer selling price during the main season of the mango cultivar ‘Cat Chu’ in Ho Chi Minh City, Vietnam Off Season (Mango variety "Cat Chu') Thousands ('000) VND / kg 30 Pe rc en ta ge (% ) o f t he to ta l nu m be r o f m an go re ta lie rs s ur ve ye d 0 10 20 30 40 50 Figure 27. Retailer selling price during the off season of the mango cultivar ‘Cat Chu’ in Ho Chi Minh City, Vietnam AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 33 Mango variety 'Ghep' Thousands ('000) VND / kg 30 P er ce nt ag e (% ) o f t he to ta l nu m be r o f m an go re ta lie rs s ur ve ye d 0 10 20 30 40 50 60 Figure 28. Retailer selling price of the mango cultivar ‘Ghep’ in Ho Chi Minh City, Vietnam FACTORS CONTRIBUTING TO FRUIT LOSS AT THE RETAIL LEVEL Estimates for total mango losses are based on the total amount of fruit lost during transport and storage. About 65.2% of retailers believe that 20% of fruit are lost, 25.6% believe that less than 10% of fruit loss occurs and the remaining 9.5% believe that fruit losses are greater than 20% (Figure 29). During transportation, 56.1% of retailers stated that between 5 to 10% are lost due to damage, 37.8% believed that fruit losses are less than 5%, and the remaining 6.1% rated the fruit losses to be greater than 10% (Figure 30). When storing mangoes at their place of business, 74.4% of retailers surveyed estimated that mango fruit losses were from 5% to 10%, 13.4% estimated fruit losses to be less than 5% and the remaining 12.2% estimated fruit losses to be greater than 10% (Figure 31). Environmental conditions and temperature management systems play a vital part in the ripening and storage and transport of Australian mangoes. It gives some control over the marketing period and shelf life fruit consignments. Temperature management is not practiced in Vietnam for mango fruit supply chains. Fruit that is held at room temperatures will start to ripen soon after harvest. As ripe fruit is susceptible to bruising and damage during transport, it is best to delay ripening so that fruit will not soften until it is at the final destination. Fruit storage conditions also contribute to the fruit quality, appearance and shelf life. The best temperature management strategy depends on the expected marketing period from harvest to consumer, therefore suppliers need to know whether the fruit is to be sold immediately or whether it will be stored by the wholesale agent. There are three stages of post-harvest life and each stage has different temperature tolerances. AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 34 MATURE GREEN Green fruit can tolerate temperatures between 10° and 13°C. Holding fruit at these temperatures will delay the onset of ripening. Storing fruit below these temperatures leads to chilling injury. The lower the temperature and the longer the storage time, the more severe the injury symptoms will become. Green fruit can be held for up to two weeks before the ripening process starts, but if they start to ripen, fruit must be brought up to 20°C. RIPENING When fruit begins to ripen, the storage temperature must be maintained between 18° and 22°C. At temperatures below 18°C, skin colour development is slow and flavour development is poor. Above 22°C, the flesh will soften but the skin colour will remain green or develop an unattractive green-yellow mottle. Post-harvest diseases also develop more quickly at temperatures above 22°C. EATING RIPE When the fruit is close to eating ripe, the fruit will tolerate cooler storage temperatures again. The best storage temperatures are between 10 and 13°C, but the fruit will tolerate a short period at lower temperatures. At this stage, shelf life is limited but it can be extended for another three or four days by storing at 7° to 10°C. Do not store ripe mangoes below 5°C and always maintain a relative humidity between 85 and 95% while in storage. % of the retailers surveyed 25.61% 65.25% 9.15% 20% fruit loss Figure 29. Retailer estimates of total percentage (%) of fruit lost during the selling process AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 35 % of fruit lost when transporting 37.8% 56.1% 6.1% 10% fruit loss Figure 30. Retailer estimates of total percentage (%) of fruit lost during transport to place of business % of fruit lost when storing 13.4% 74.4% 12.2% 10% fruit loss Figure 31. Retailer estimates of total percentage (%) of fruit lost during storage at place of business AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 36 PRESERVATION TECHNIQUES AND POST-HARVEST TECHNOLOGIES APPLIED BY RETAILERS Many mango retailers indicated that during the post-harvest phase, diseases such as stem-end rot and anthracnose are the biggest causes of loss. The use of calcium carbide (CaC2) to ripen mango helped mango become more attractive to consumers, though many retailers indicated that fruit ripened using CaC2 makes the fruit highly susceptible to fruit rots. Fruit treated with CaC2 are also softer and more sensitive to mechanical damage during the handling process. CaC2 can pose a serious health risk if used incorrectly. Many high class fruit shops were applying cool temperature handling methods, but also wished to apply other technologies, such as chemical treatments to assist in the ripening of mangoes, or packaging and coating of the fruit to extend the shelf life. Many retailers are uncertain about how to apply new technologies. They are also hesitant to apply such treatments due to perceived high costs involved. Many fruit shops cover the fruit with paper or plastic bags to preserve the fruits or reduce mechanical damage during handling. In high class supermarkets and high class fruit shops, covering the fruit with plastic enhances the fruit appeal and selling power to the consumer. Some shops and vendors selling fruit on the sidewalk, where the fruit is exposed to the sun, will cover the fruit with green leaves to stop spoilage and excessive heat build up in the fruit. Many retailers sprinkle water over the fruit to enhance the appeal to consumers, fruit glistening with water droplets adds to consumer appeal by indicating that it is fresh, clean, are being preserved well by the seller. Table 7 indicates the various techniques used by retailers to prolong the mango fruit shelf life and enhance the fruit selling ability to the consumer. Table 7. Techniques used by retailers to enhance mango fruit shelf life and consumer appeal in Ho Chi Minh City, Vietnam Technique description Supermarkets Shops Retail markets Vendors Remove the ugly fruit X X X X Washing fruit X X X Watering X X X Enclose the fruit with plastic bags X X Wrapping the fruit X X Cover the fruit with green leaves X X Shade the fruit X X X X Store the fruit in refrigerated rooms X X Cold storage facilities X Stored in the houses/shops with ventilation X Stored in the houses/shops without ventilation AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 37 DIFFICULTIES AND COSTS ASSOCIATE WITH RUNNING A RETAIL BUSINESS IN HO CHI MINH CITY, VIETNAM Costs associated with running a fruit retail business in Ho Chi Minh City were highly dependent upon the type, area and nature of the retail business. Survey findings showed that vendors and supermarkets owned the business premises. This is in contrast to retailers with stand alone fruit shops and fruit shops in retail markets where 25% owned their own premises and 75% had to hire their premises. Due to the transient nature of a vendor’s retail business, no established hire fees are paid, but many street vendors complained that they were always supervised and chased by the police because they did not always obey the street laws when selling fruit. Many vendors wished they had a shop space as this was perceived as having a more stable business. The survey found that about 5% of fruit retailers with a business establishment inside retail markets such as An Dong, Xom Chieu and Hoa Binh markets, complained their shop spaces were not suitable. A further 5% of retailers at the markets complained that there were too many fruit shops and fruit vendors at the one location. They said that 2005 – 2006 profits were not as high as in previous years, but as this was their job for the past ten years, they did not want to change to another profession. Many retailers said that consumers preferred to purchase fruit on the pavement because they did not have to pack their bicycles, manoeuvre their bicycles in the confines of the tight market spaces and personally carry heavy bags of fruit in the tight confines of the fruit retail market. Therefore, many retailers have moved their fruit sales to the market pavements outside the retail markets, but they are still required to hire a shop space inside the markets. Hire fees at the various markets in Ho Chi Minh City are shown in Table 8. Table 8. Retail fruit shop hire rates in Ho Chi Minh City Vietnam Market Location or Street Name Cost in VND per month per shop space or fruit shop Ben Thanh, An Dong and Ba Chieu markets 500 000 to 1 000 000 per month Van Thanh, Hoa Hung and Tan Son Nhat markets 200 000 to 500 000 per month Le Thanh Ton, An Duong, Nguyen Tri Phuong Streets (high class fruit shops) 2 000 000 to 5 000 000 VND per month LABOUR REQUIREMENTS FOR RETAIL SHOPS AT MARKETS AND FRUIT SHOPS About 95% of the fruit shop retailers located in retail markets had to hire labour to help run their business. The retailers located in retail markets needed at least one employee, compared with the high class fruit shop retailers, who need up to five workers. Wages paid to these workers by retailers is about 600 000 VND to 1 000 000 VND per month, plus conditions such as providing lunch for these workers. AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 38 TAXES AND FEES PAID BY RETAILERS TO OPERATE THEIR BUSINESS Taxes and fees for supermarkets could not be separated easily from other costs, but estimates place these at approximately 15% of the selling price. Business rates for the retail market shops were about 1 000 000 VND to 1 200 000 VND per year. Survey results found that 76% of retailers pay 300 000 VND per month in taxes for electricity and water, and the remaining 24% pay 300 000 VND to 500 000 per month. INFORMATION FLOWS, EXCHANGES AND BUSINESS FESS PAID BY RETAILERS TO ASSOCIATIONS Retailers identified that markets and consumer are their most important areas of information, but the availability of information in these specific areas is limited. Many retailers indicated that the supply chain they are involved in was the most effective place to obtain news on market problems and changes in mango quality and quantity. Associations and other resource organizations utilized by retailers were Vinafruit, Farm Club and the various National Trade Associations. Wholesalers did not participate in any clubs, due to their apparent lack of available time. Some retailers did attend the clubs such as Red Cross and Women’s Club, but this was chiefly for social activities. All retailers surveyed wanted the protection which associations offer, particularly in regards to fruit quality and price. Figure 32 indicates the percentage of the total retailers and their contact fess paid to associations. Annual Association Fees Thousands ('000) of VND per year <200 200 - 500 500 - 1 000 Pe rc en ta ge (% ) o f t he to ta l n um be r of re ta lie rs s ur ve ye d 0 10 20 30 40 50 60 Figure 32. Annual subscription fees paid by retailers to associations in Ho Chi Minh City, Vietnam AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 39 SURVEY OF MANGO WHOLESALERS AND COLLECTORS HO CHI MINH CITY FRUIT AND VEGETABLE CENTRAL MARKETS The Ho Chi Minh City Fruit and Vegetable Central Wholesale Markets were moved from the inner city centre (District 1) to their present location in District 7 on the outskirts of HCMC. The new 20 hectare site holds 900 fruit and vegetable stalls with approximately 600 commercial family businesses trading from these stalls. For each fruit and vegetable wholesaler/trader/vendor, there are three quality grades for produce:- high, medium and low quality. All vendors sort and grade the product upon arrival at the markets. This occurs even though sorting and grading has usually already occurred at collectors, traders, or cooperative consolidating or farmer’s houses at the village level. Each commercial family business will only trade two or three commodities. The commodities selected complement each other to ensure year-round income and trading ability. Types and volumes of product traded are highly dependent upon the season. On average, approximately 1 400 to 1 700 tonnes of fruit and vegetable product move through these markets per day. About 50% is fruit and 50% vegetable, but this varies depending on the season. During the festive season approximately 4 000 tonnes of fruit and vegetables product will move through this market per day Product is sourced from all over Vietnam, with the majority of product coming from the Mekong Delta. Product is also received from northern, central and highland regions of Vietnam. About 30% of the product moving through these markets is imported. Main countries of origin of this imported product are China, New Zealand, USA, Australia and Thailand. Volume and price data for each commodity is collected each day and a report is sent to the Department of Trade and Department of Finance. These departments will sell this market information to the media and other interested companies. This information is usually communicated to newspapers or radio by telephone for publishing and distribution in daily market reports. Approximately 400 trucks visit these markets each day. The move from District 1 to District 7 has facilitated market access for produce trucks. Trucks are not permitted to enter the HCMC before 9:30 pm at night and after 9:00 am in the morning. This curfew was in place to ensure the trucks did not affect the daytime traffic flow in HCMC. Average fruit prices are displayed on a large electronic board at the front of the markets, for example, the price for Cat Hoa Loc mango was 14 000 VND per kg on the 29th of April 2006. WHOLESALERS EXPERIENCE AND LENGTH OF TIME IN THE TRADE IN SOUTH VIETNAM All wholesalers, and especially those who were at the Ho Chi Minh City‘s wholesale markets, have been in their line of business for over 5 years (Figure 33). There has been a significant increase in the number of wholesales and business shops in the provinces due to the increasing production and the domestic consumption demands for mango. AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 40 21.9% 50.0% 15.6% 12.5% 30 Figure 33. Distribution of surveyed wholesalers’ trading time (years) TRANSPORTATION PRACTICES Ten tonne trucks are the main transport system used for transporting mango fruit to the Thuc Duc wholesale market in Ho Chi Minh City. Boats were used for transporting mango fruit to the Ton That Thuyet floating markets when they were operating. Boats are also used sometimes to transport mango fruit to the Chon Lon markets. Trucks are often stopped on the way to the markets in Ho Chi Minh City and inspected by the police. This can occur several times. An inspection fee is charged, and this fee is paid on the spot by the transporter. This fee is then passed back down the supply chain to the farmer. Farmers pay for the transport cost, even to HCMC, this cost is then deducted from the farmer’s final payments by the collector or wholesaler. Fruit are often collected during the day at local markets or collector houses. Trucks are packed to capacity and held until being transported to the wholesale markets at night. In Cai Be market, all traders receive fruit by boat, truck, and occasionally by motorbike delivery. The farmer or the collector pays for the transport, which is usually between 12 000 – 15 000VND per basket. All wholesalers believe that 1-2% fruit is damaged in transit and this cost is covered by the supplier (collector/farmer), or occasionally by the transporters if fruit is being sold at the Ho Chi Min City market. Damaged fruit is sold at a lower price, thrown away at the market, or sent back to the supplier. Wholesalers at the Cai Be Markets distribute fresh mango domestically to northern, central and southern Vietnam and export to China (Figures 34 and 35). AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 41 Cai Be market wholesalers Retailer HCMC Hanoi China Other HCMC Vietnam Southern Vietnam Central Vietnam Northern Vietnam Figure 34. Supply chain map of mango fruit from Cai Be Markets, southern Vietnam. Figure 35. Supply chain map of fresh fruit exports of mango from Mekong Delta to China. Chinese customers Vietnamese representative near China border Wholesaler in Mekong delta Regulator Collectors Farmers Farmer who sell directly to wholesaler AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 42 WHOLESALER PURCHASING PRACTICES Most wholesalers located at the Ho Chi Minh City wholesale markets purchase mangoes from provincial collectors. A few of the wholesalers purchase mangoes directly from the growers, saying that the mangoes are cheaper directly from growers than from collectors. All wholesalers interviewed in the Cai Be and Vinh Kim markets sell a variety of fruit throughout the year. The type of fruit sold is dependent upon what fruit is in season. The most common varieties of mangoes sold by wholesalers in both markets are, “Cat Chu”, “Cat Hoa Loc”, and “Ghep” mango. Some also sell the varieties “Thom”, “Thanh Ca” and “Xiem” mango. In the Cai Be market, all businesses interviewed were wholesalers who purchase the fruit from farmers/collectors and on-sell. These wholesalers pay about 5-10% more to collectors than farmers. On average, the price paid is about 200 VND/kg in 2006. All surveyed wholesalers verbally agree to terms of trade with collectors and farmers. The purchase price, quantity purchased and grades are all set during these verbal agreements, but if a wholesaler purchases the farmer’s entire crop, a contract must be put in place. About 30% of the agreed purchase price is paid at the time of agreement or contract signing, with the final 70% paid when the crop is received. All transactions undertaken by the wholesalers are in cash. Wholesalers indicated that the most profitable mango to deal is “Cat Hoa Loc”, followed by “Cat Chu” then “Ghep”. Several wholesalers interviewed at the Thu Duc markets indicated that they had few difficulties because they worked on a commission basis. They receive a commission of about 7% of the total turnover from the collector, who they act for to sell the collectors’ mangoes to supermarkets and retailers When purchasing mangoes, 45% of wholesalers complained that the deliveries they received did not follow the verbal agreements entered into with collectors and farmers. About 25% of wholesalers also indicated that they had to stay up late and get up early due to the difficulties of working in the wholesale market sector. Figure 36 shows the breakdown of difficulties experienced by all wholesalers surveyed. 45% 25% 10% 15% 5% Sellers did not follow the agreed price, quantity and quality Difficulties with wholesale marketing, (staying up late and getting up early) Distance fruit hat to be transported to reach the wholesalers market Fruit were not of uniform size Difficulties with the weather Figure 36. Wholesaler difficulties when purchasing mangoes. AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 43 WHOLESALER MANGO PURCHASING PRICES Wholesalers purchase non-graded mangoes in 35kg baskets. For the mango cultivar “Cat Hoa Loc”, wholesalers paid, on average, 5 000 – 10 000 VND/kg in the main season, and 15 000 – 20 000 VND/kg in the off season. For the mango cultivar “Cat Chu”, the wholesalers’ average purchase price was 15 000 VND/kg in the main season and 15 000 – 20 000 VND/kg in the off season. The mango cultivar “Ghep”, is available through out the year, and wholesalers paid, on average, less than 3 000 VND per kg. Prices for “Ghep” ranged from 2 000 to 5 000 VND per kg (Figure 37, 38, 39, 40 and 41). Main season (Mango Cultivar "Cat hoa Loc') 0 10 20 30 40 50 60 70 80 20 Thousands (000) VND / kg P er ce nt ag e (% ) o f t he to ta l n um be r o f w ho le sa le rs s ur ve ye d Figure 37. Wholesaler purchasing price during the main season of the mango cultivar ‘‘Cat Hoa Loc’’ (Mango Cultivar "Cat Hoa Loc") 0 10 20 30 40 50 60 20 Thousands (000) VND / kg P er ce nt ag e (5 ) o f t he to ta l n um be r o f w ho le sa le rs s ur ve ye d Figure 38. Wholesaler purchasing price during the off season of the mango cultivar ‘‘Cat Hoa Loc’’ AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 44 Main Season (Mango cultivar "Cat Chu") 0 5 10 15 20 25 30 35 40 45 50 20 Thousands (000) VND / kg P er ce nt ag e (% ) o f t he to ta l n um be r o f w ho le sa le rs s ur ve ye d Figure 39. Wholesaler purchasing price during the main season of the mango cultivar ‘‘Cat Chu’’ Off Season (Mango cultivar "Cat Chu") 0 10 20 30 40 50 60 20 Thousands (000) VND / kg P er ce nt ag e (% ) o f t he to ta l n um be r o f w ho le sa sl er s su rv ey ed Figure 40. Wholesaler purchasing price during the off season of the mango cultivar ‘‘Cat Chu’’ AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 45 Yearly purchase price of mango cultivar "Ghep" 0 10 20 30 40 50 60 70 80 90 100 20 Thousands (000) VND / kg P er ce nt ag e (% ) o f t he to ta l n um br e of w ho le sa ls er s su rv ey ed Figure 41. Wholesaler purchasing yearly price of the mango cultivar ‘‘Ghep’’ QUANTITY OF MANGO SOLD BY WHOLESALERS On average, wholesalers sold 20 – 60 tonnes of mango per year. During the main season, the number of mango wholesalers was 47% higher than in the off season. There appears to be two distinct groups of wholesalers based on the amount of mangoes sold; those who sell over 100 tonnes per season, and those who sell less than 60 tonnes per season. About 37% of surveyed wholesalers sold more than 100 tonnes of mangoes during the main season. In the off season, about 58% of wholesalers sold more than 100 tonnes of mangoes. The group selling less than 60 tonnes of mango during the main season made up about 50% of the total number of wholesalers surveyed, and 42 % of total wholesalers in the off season (Figures 42 and 43). AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 46 Main Season 0.00 5.00 10.00 15.00 20.00 25.00 < 5 `5-0 `10-20 `20-40 `40-60 `60-80 `80-100 `100-150 `150-200 `200 250 `250-300 `300-400 Tonnes of mango sold P er ce nt ag e (% ) o f t he to ta l n um be r o f w ho le sa le rs s ur ve ye d Figure 42. Quantity of mango sold during the main season by wholesalers Off Season 0.00 5.00 10.00 15.00 20.00 25.00 30.00 < 5 `5-0 `10-20 `20-40 `40-60 `60-80 `80-100 `100-150 `150-200 `200 250 `250-300 `300-400 Tonnes of mango sold P er ce nt ag e (% ) o f t he to ta l n um be r o f w ho le sa le rs s ur ve ye d Figure 43. Quantity of mango sold during the off season by wholesalers WHOLESALER MANGO SELLING PRICES AND PROFIT Most of the wholesalers surveyed indicated that they traded in mangoes for about six months of the year. The selling prices for mango varied between the different markets. The wholesalers selling price for mango in the provincial markets is generally lower than in Ho Chi Minh City. Most wholesalers grade the purchased mango fruit into first and second grade. First grade wholesale price for mango cultivar “Cat Hoa Loc” was 1 000 - 3 000 VND per kg more expensive than the second grade. First grade wholesale price for mango cultivar “Cat Chu” was 1 000 – 2 000 VND per kg more expensive than the second grade. First grade wholesale price for mango cultivar “Ghep” was 500 VND per kg more expensive than the second grade. AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 47 All wholesalers agreed that “Cat Hoa Loc” was the most profitable variety due to its ease of handling and selling. About 61% made less than 10 million VND profit each year from selling mangoes. 32.65% of wholesalers made less than 5 million VND profit, 28.57% made 5-10 million VND profit, 14.29% made 10- 20 million VND profit, 16.33% made 20-40 million VND profit, and the remaining 8.16% made between 40- 100 million VND profit per year from selling mangoes (Figure 44). All wholesalers surveyed agreed that market price fluctuations made it extremely difficult for them to determine the correct selling price, especially when there was an abundance of fruit in the market. Additionally, 10% of wholesalers complained that there are too many salespersons and the profit from selling mango is not high. Sometimes they had to reduce the selling price to below the purchase price. 10% of wholesalers indicated the markets place/location or shop space caused some difficulties with selling. 10% indicated that mangoes are a difficult fruit to sell. 10% said that taxes were too high and wholesalers at the Thu Duc wholesale markets were struggling to reduce taxes. 10% indicated that there are many other factors that affected sales, while 50% of wholesalers were unsure of what other factors affected their sales. Most wholesalers agreed that late season mangoes were difficult to sell, because they believed consumers were bored with this fruit and purchased other types of fruit. Also the appearance of late season mango is poor, ugly, fruit were more prone to fruit rots and were more expensive. According to their experience, the best time to sell mangoes was at the beginning of the season. Wholesaler profit per year (million of VND) 32.65% 28.57% 14.29% 16.33% 8.16% < 5 `5-10 `10-20 `20-40 `40->100 Figure 44. Percentage of the total number of wholesalers surveyed and their profit per year for trading in mangoes. AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 48 Table 9. Summary of mean prices (VND/kg) in Tien Giang Province for mango varieties for January to April 2005 (SOFRI, 2005) Class of fruit Month Variety Name Special Class 1 Class 2 Class 3 Cat Hoa Loc 22,417 17,775 14,208 7,167 Cat Chu 10,083 8,000 4,592 2,433 Jan. Ghep 4,988 4,375 3,283 2,325 Cat Hoa Loc 15,458 12,667 9,617 5,892 Cat Chu 7,442 5,800 4,175 2,433 Feb. Ghep 4,317 3,508 2,658 1,842 Cat Hoa Loc 19,708 16,667 13,708 9,067 Cat Chu 8,429 6,517 5,017 2,992 March Ghep 4,642 3,780 2,842 2,092 Cat Hoa Loc 13,958 11,233 8,958 5,033 Cat Chu 7,200 5,575 4,000 2,592 April Ghep 3,675 2,817 2,050 1,442 WHOLESALER BUSINESS OPERATIONAL EXPENSES There has been a significant increase in the number of wholesalers now setting up businesses in provincial cities and supplying directly to retailers, supermarkets and high quality fruit stores in Ho Chi Minh City. The houses for many of these wholesalers are also their place of trade. Wholesales operating at the provincial markets incur costs for rent of space (See Figure 45 below). AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 49 Rent in millions of VND / month for provincial market space 34.28% 8.57% 22.86% 34.29% 0.6 `0.6-0.8 `0.8-1 >1 Figure 45. Percentage of the total number of wholesalers surveyed and cost for provincial market space (rent) in millions of VND per month. At the wholesale markets in Ho Chi Minh City, rent is about three times higher compared to the provincial market rates. At the Thu Duc wholesale markets, rent is about 3 million VND per month and the wholesale market shop space is approximately 9m2. Wholesalers can also purchase a shop space for about 40 – 50 million VND per shop space. Many wholesalers have purchase several shops while renting others. The amount of shop space required by each wholesaler depends upon their specialization. Fluctuations in seasonal supplies of fruit and vegetables also impacts upon the amount of wholesale shop space required. LABOUR COSTS Most wholesalers need approximately 3-5 people to assist them in running their wholesale business. This number can grow to 10-20 people, particularly for those wholesalers located in the production areas. Wages paid to these labourers is about 800 000 – 1 million VND per person per month. Wholesalers also have to pay for their labourer’s lunch. TAX AND ELECTRICITY AND WATER FEES Some wholesales pay taxes daily or monthly. In some production areas, wholesalers do not pay any taxes due to trade encouragement incentives. On average, the amount and percentage of wholesalers paying taxes on a monthly basis are shown in Figure 46. AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 50 Taxes in thousands (000) of VND / month 28.75% 17.14% 54.29% 300 300-500 500-1 000 Figure 46. Percentage of the total number of wholesalers surveyed and the amount of taxes paid in VND / month to operate their business. WHOLESALERS POST-HARVEST HANDLING TECHNIQUES AND PRACTICES Fruit losses along the supply chain can be high due to farmers not applying any post-harvest practices, such as grading or culling of fruit showing any signs of disease or damage. At the provincial wholesale markets, wholesalers are able to store fruit for a day or more because the fruit are regarded as being fresh. Fruit are usually still in a hard green state and any diseases present on the fruit have not yet started to affect the fruit. Any internal mechanical damage occurring during harvesting or physiological disorders will not yet be visible. Mechanical damage due to impacts to the fruit whilst grading will not be immediately visible whilst fruit are in this hard green state. These defects, however, will become visible when the fruit starts to ripen or is cut open by the consumer. For these reasons, fruit losses at the provincial markets are considerably lower than fruit losses at the wholesale markets in Ho Chi Minh City. Fruit in Ho Chi Minh City is also attacked by insects, mice and ants when stored for several days, therefore wholesalers in Ho Chi Minh City prefer to sell all the fruit assigned to them within a day. Wholesalers in the provinces handle mango fruit differently to those in Ho Chi Min City. Provincial wholesalers wash fruit to remove dirt and foreign matter