Activity 1.4 Mango Market Assessment

Activity 1.4Mango Market Assessment

Phan Thi Xuan DieuSCAP

15 October 2019

Improving smallholder farmer incomes through strategic market development in mango

supply chains in southern VietnamAGB/2012/061

© Griffith University 2018 2

Market assessment activity focus analysis of 2 main domestic markets -

Hanoi and Ho Chi Minh City

Obtain an in-depth understanding of key issues, market & consumer

insights (e.g. retailers, wholesalers/traders, food services companies,

processors, & exporters)

Fresh mango trade

Introduction


Updating and documenting the current situation of market segment,

products flows, and demand of mangoes in the two targeted metros

Understanding the information of seasonality, fruit quality parameters, and

requirements from consumers, especially for local mango varieties such as

Cat Hoa Loc and Cat Chu mangoes

Understanding the current level of processing, range of products, demand

and supply of processed mango products

Understanding the current development of logistics and economics

supporting the mango sub-sector, especially for domestic consumption

Research aim


Literature/desktop review

Mango is one of the government-nominated priority fruits with significant potential for economic benefit to the Mekong River Delta region

Mango is the second most popular fruit in Vietnam (after banana in term of producing areas) grown in many provinces (MARD, 2019)

Approximately 94% of mango farms are smaller than 0.5 ha

There could be more than 70,000 mango farming households with a primary income source of 105.4 million dong (US$4,464), substantially more than rice (ADB, 2013)

Between 2017 and 2018, mango export value rose from US$155.88 million to US$193.22 million

Export of processed mangoes also shows an increasing trend in the period of 2016 – 2018. The value reach more than US$10 million in 2018 (MOIT, 2019)

Lack of current understanding of the value chain and market segmentations for mangoes in HCMC and Hanoi results in poor communication between markets and farms and hinders the development of mango markets


► A qualitative research approach was used► Semi-structured in-depth interviews were undertaken with key informants in HCMC

and Hanoi between June and September 2019► A checklist of key questions was used to guide the interviews► Each interview lasted around one hour and notes were taken during the interviews.

► Interview documents were analysed through a framework analysis approach

► Ideas, concepts, short phrases from transcripts are noted down and categories/ themes begin to develop

► Key issues, concepts and themes expressed by participants form basis of the thematic framework

Methodology


General information of respondents

Total: 26 informants (18 informants in HCMC, 8 in Hanoi)

Types of informants: wholesalers, retailers (wet markets, supermarkets, grocery stores, fruit stores), food services (hotels, restaurants, catering, coffee shops), processors and exporters


General information of respondents (cont.)

Majority of responding organisations have at least 5 years of

experience in fruit sector

Some food service enterprises have less than 5 years of experience

Some retailers in HCMC have up to 20 years of experience


Domestic mango flow in domestic market


Domestic mango flow in international market


Mango varieties

In HCMC, Cat Hoa Loc, Cat Chu, and Keo are the 3 mango varieties frequently mentioned

In Hanoi, Cat Chu, Nha Trang, and Keo are 3 popular varieties Green-skin-Taiwan mango and Tu Quy mango are popular in HCMC

market; green-skin-Thailand mango and green-skin-Taiwan mango are also popular in Hanoi market

Each mango variety has its own competitive advantages and/or disadvantages


Advantages and disadvantages of mango varieties in HCMC and Hanoi


Purchase activities

1 informant deals directly with individual farmers and sources around 70% of their mangoes directly from farmers

Large and well-known enterprises do not have to find mango suppliers since suppliers (farmer groups, agriculture cooperatives and traders) approach them

Less established businesses find suppliers via friends’ recommendations and the internet while some suppliers also approach these businesses

In Hanoi, most respondents find suppliers by themselves at the wholesale market and 1 informant finds suppliers through trade fairs


Purchase activities (cont.)

Small businesses that purchase small quantity of mangoes (as food service companies, stalls in wet market) do not have formal contracts with suppliers.

Established and large businesses, exporters, supermarkets usually have formal contracts with suppliers.

Companies having long-term relationship with suppliers are very confident about quality standards of suppliers. Other companies only have around 70% confidence in the quality standards of their suppliers.

Besides long-term relationship, interviewees in Hanoi feel confident about mango quality when they can verify the mango origin.



When purchasing mangoes, purchasers’ requirements can be categorisedinto three main groups: (1) appearance, (2) quality, and (3) production certification

Appearance requirement: size, skin, and shape

Quality: sweet, fragrant and smooth flesh

Some exporters, supermarkets and fruit stores also require GAP certification from suppliers

Large companies (especially exporters) will check for pesticide residues and mango maturity

Some fruit stores in Hanoi also require fully ripe mangoes


Purchase prices are influenced by: (1) on-season or off-season(2) purchase quantity(3) purchasing from whom (where in the value chain), and (4) other options (can mangoes be returned individually) Purchase prices of the same mango varieties in Hanoi are higher

than in HCMC (sometimes double or triple)



Packaging sizes when mangoes are purchased directly from orchards are 20–40kg plastic bags

If mangoes are bought from trading companies, they are packaged by polystyrene boxes with holes then put into plastic baskets or bamboo basket

Trucks (not refrigerated) are the main transportation from suppliers. If the quantity is small, suppliers also transport mangoes by motorbikes



Sale prices depended on season (on-season or off-season) and size (bigger size higher price)

December–January, mango prices are high even when supply is high because the demand for mango is higher (especially for Cat Hoa Loc and Cat Chu varieties as gifts or fruit display for ancestors’ worship at new year

Every month, mango prices are higher on the 1st day, 10th day, and 15th day of lunar month (full moon days)

Sale activities


Sale activities (cont.)

Majority of domestic retailers do not use QR code

Large supermarket chains have shown their interest in developing

QR codes for traceability.

“Traceable products have high quality, relatively identical in size,

however, higher price. Traceable mango suppliers choose clients

buying large quantity of mangoes. But supermarkets’ sales are low so

we are not their preferred client”.


Mango losses due to damage occurring along the chains

Total percentage of mango losses (for both quality and quantity losses) in the chain is quite high – from 13% up to 19% on average (in HCMC).

StakeholdersPercentage losses from suppliers to

(%)

Percentage losses at selling/processing

places(%)

Percentage losses to buyers

(%)

Retailers 2 – 3 About 5 1 – 3Food Services/Processors

About 5 4 – 6 About 5

Exporters/Traders 5 – 10 3 – 5 5 – 10


Mango losses due to damage occurring along the chains

From the interviewees, losses are caused by the following reasons:

Physical damage can happen if mangoes contact each other during transport

Mango flesh is quite soft and mango skin is very thin. When harvesting, if mangoes reach ripe level, they ripen quickly

Quality problem such as mango flesh is too soft

Mangoes have been harvested with stems that are too short, causing breaking down of mangoes: bruising, sap burn and broken fruit

Storage (in the trucks, at the pack houses) is a loss impact factor

Packing type is also a factor

In the case of supermarkets, losses might happen due to customers’ inappropriate handling


Challenges and barriers to development of mango market in Vietnam

High quantity and quality losses along the chain Dealing with smallholder farmers and issues related to conventional

supply chain Higher yield often results in lower quality mangoes Lack of market information for both domestic and international

markets An emerging competition with imported fruits


Cat Hoa Loc and Cat Chu are respectively the most preferred mango variety in HCMC market and Hanoi market

Retailers do not source mangoes directly from farmers because most are smallholders

Agricultural cooperatives, farmer groups, collectors, wholesaler/traders act as the intermediaries between farmers and consumers

Mango price depends on season, variety and a number of quality parameters and prices in Hanoi are much higher than in HCMC

Current practices in terms of storage and transportation have caused high levels of damage

There are opportunities to develop the Mekong mango value chain in the future by applying interventions to increase mango demand and value

Conclusion


Future research

Study the use of QR codes for mango trade

Design and research gift box options for Cat Hoa Loc mangoes

Evaluate the opportunity to train farmers to achieve certification

Study packaging and transportation to reduce losses


ACIAR. (2014). Evaluation of agribusiness research and development opportunities

for tropical fruit in southern Vietnam (AGB-2013-018). Small research and

development activity (SRA). Australian Centre for International Agriculture Research

(ACIAR)

MARD. (2019). Yearly Summary Report of Agriculture Sector. The Ministry of

Agriculture and Rural Development (MARD) of Vietnam. Retrieved from

https://www.mard.gov.vn/Pages/nganh-nong-nghiep-phan-dau-dat-kim-ngach-xuat-

khau-42--43-ty-usd-nam-2019.aspx (In Vietnamese)

MOIT. (2019). Weekly report of International Trading. The ministry of Industry and

Trade (MOIT) of Vietnam (In Vietnamese)

References

https://www.mard.gov.vn/Pages/nganh-nong-nghiep-phan-dau-dat-kim-ngach-xuat-khau-42--43-ty-usd-nam-2019.aspx

Documents

Activity 1.4 Mango Market Assessment