Fruits and Vegetables in Vietnam - International Food Policy ...

domestic traders. In the South, only about 13 percent of revenue was obtained from other domestic
traders.
As shown in Table 4-21, vegetable trade and export earnings by businesses in the North are
about 34 times larger than those of their competitors in the South. By contrast, fruit related earnings
by domestic traders and exporters in the North are only about 93 percent of the revenue of those
located in the South. As in the aggregate case, both fruit and vegetable exporters sold direct to foreign
customers (about 90 percent). After processors, domestic traders sold the bulk of their vegetables to
other domestic traders (42.2 percent). In the case of fruit however, only 14.5 percent of revenue came
from sales to other domestic traders. Rather, about 28.0 percent of revenue was obtained from sales to
licensed exporters, particularly in the South where 34.0 percent of sales revenue comes from sales to
licensed exporters.
By disaggregating the data, the average exporter earned about 1.2 billion VND in revenue
from the sale of both fresh produce and processed products in 2000. Domestic traders and exporters in
the South sold fresh produce only. In the North, by contrast, traders sold both fresh produce as well as
various types of processed products. In comparison to exporters, domestic traders by contrast, earn
over 12 times more revenue from the sale of fresh produce than from other processed products.
11.2 Orders and payments
Overall, nearly 83 percent of traders took orders for the delivery of their produce at a future
date. Of these traders, about 81 percent of the total sales revenue was obtained through buyers placing
orders (see Table 4-22).
About three-quarters of the domestic traders and exporters in the South had problems with
buyers who wished to renegotiate the sale price at the time of delivery. Other problems experienced
by traders were related to disagreements over the quality of the produce delivered to the buyer (34.9
percent), and late and partial payment for the delivered produce (22.1 and 18.6 percent, respectively).
While all domestic trader transactions were completed on a cash basis, over 88 percent of purchases
by exporters were completed on a cash basis. For about 11 percent of purchases, and 12 percent of
sales, exporters also paid for produce, goods, or services using bank wire transfers. However, in
addition to payment in local currency (43.2 percent), exporters also received payment in other
currencies, mainly US dollars.
Consignment sales are a common method for conducting sales transactions and extending
credit to customers and generally used more often by domestic traders, and by firms located in the
North. Overall, over three-quarters of traders sold goods on consignment in 2000. Of these firms,
about 61 percent of sales were made using consignment sales.
Chapter 4. Fruit and Vegetable Traders Page 4-15