Businesses suffer as durian farmers seek higher prices, fail to honor agreements

Van Hoa, a durian packaging and exporting company with a capacity of 100,000 tons a year, has lost out on many contracts recently.

"We committed early to pay VND60,000-80,000 (US$2.49-3.32) per kilogram, but close to harvest season traders came and offered up to VND100,000, which resulted in many farmers canceling their deals with us," Van Hoa director of foreign affairs Le Anh Trung said at a forum Monday.

Van Hoa therefore could not fulfill its export orders and has suffered losses on each shipment.

The company has decided not to make early commitments to farmers in future, meaning there is no guarantee they will be able to sell their harvests.

Nguyen Huu Chien, director of trading company Tan Lap Dong in Dak Lak Province, said he did not have enough durian to sell to two export partners after farmers dishonored their deals with him.

"When we businesses give farmers a price quote in the morning, traders will come in the afternoon and offer higher prices."

These traders are often not precise in following Chinese origin tracing standards and therefore could cause Vietnam to lose this major market, he warned.

Speculators need to be penalized, he added.

Ngo Xuan Nam, deputy director of the Vietnam Sanitary and Phytosanitary Notification Authority and Enquiry Point, said authorities are reviewing the process of producing and exporting durian.

He also ordered local authorities to suspend the activities of farmers who do not follow origin tracing protocols.

Minister of Agriculture and Rural Development Le Minh Hoan called on businesses and farmers to establishing stronger commitments starting in the early phase of a crop.

Local authorities need to ensure that farmers follow origin tracing protocols since durian is the face of Vietnamese agriculture, he added.