Chinese buyers put local traders in a bind

TN News

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Chinese traders and their interpreters have become a common sight on Vietnamese farms these days, and it is not a happy one for Vietnamese businesses.

Fruits, sugar, spices, poultry"¦ whatever it is they are growing, the farmers say they prefer to sell their produce to Chinese traders not only because they pay more than their Vietnamese counterparts, but also because they pay instantly and do not ask for transportation assistance.

As a result, Vietnamese businesses are struggling to buy enough food to supply the local market.

Do Ha Nam, chairman of the Vietnam Pepper Association, said local businesses have lost out in the competition against Chinese counterparts to buy pepper.

"Chinese vendors have bought up pepper in the north-central region and in the Central Highlands. Local companies cannot compete with them as they directly come to the farms and pay VND3,000-4,000 more per kilogram," said Nam.

Some of the major egg suppliers to the Ho Chi Minh City market, including the Ba Huan and Vinh Thanh Dat companies, have said the quantity of poultry eggs they purchase every day from the Mekong Delta has fallen by 30-40 percent recently.

This is because many enterprises in the Delta have collected a large volume of fresh eggs to make salted eggs to sell to Chinese businesses, they said.

"As the Mid-Autumn Festival approaches, demand for salted eggs a key ingredient in mooncakes is very large. So many Chinese businesses have come to Vietnam and are competing with local firms in buying eggs," said Pham Thi Huan, general director of the Ba Huan Company.

The Mid-Autumn Festival, one of the most important festivals in Vietnam and China, falls in the middle of the eighth month of the lunar calendar. And mooncakes are a delicacy made usually for this festival.

Local sugar companies are facing the same problem as other firms.

Nguyen Thanh Long, chairman of the Vietnam Sugar Association, said with a kilogram of sugar being sold at about VND30,000 in China, 50 percent higher than in Vietnam, some sugar plants in the northern and central regions are selling large volumes to traders who then export it to China via border-trade.

Long said his agency is considering imports to offset the resultant dearth of sugar in the local market.

Economist Le Dang Doanh said too much export dependence on one market carries several disadvantages and risks. Once a market emerges as a dominant buyer, it will be able to force local prices down, he said.

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