Longan prices are low, leading to reduced revenue.

Việt Nam•19/08/2023

In Noong Hẹt commune, lychee orchard owners have to bring their lychees directly to the processing plant to sell them.

Pom Lot is a commune in Dien Bien district with a long tradition of processing dried longan. In some seasons , 10-12 households in the commune process dried longan, creating jobs for hundreds of seasonal workers . Each longan season, the entire commune processes several tens of tons of dried longan. However, this year, the atmosphere at the dried longan processing facilities in the commune is significantly quieter. Despite being the peak longan season, only 5 kilns are operating in the entire commune, and even those are not operating at full capacity. Some households even only fire their kilns for 7-10 days before extinguishing the fire and burying the ashes.

Mr. Vu Van Minh, from Team 9 , Pom Lot Commune, has been processing dried longan since 1998. With 25 years in the business, Mr. Minh now owns three longan processing ovens with a capacity of 3 tons per season. Although it's only a seasonal activity, longan processing has helped Mr. Minh's family increase their income, improve their lives, and create jobs for dozens of people in Team 9. This year's longan season, Mr. Minh continues his annual work , but he's starting the ovens later and only operating two of the three.

Mr. Vu Van Minh said: "The longan processing business is becoming increasingly difficult. In recent years, we've always suffered losses because the price of longan has dropped while input costs have increased. In 2022, when the longan orchards were just starting to flower, I went searching for and bought entire orchards to create a raw material supply for the longan processing facilities. The weather was unfavorable during the ripening season, with prolonged heavy rains causing a lot of fruit to fall. Some orchards that cost 8 million VND to buy only yielded about 40% of the harvest; some even lost everything, orchards that cost 6 million VND at the beginning of the season were completely lost . Meanwhile , the price of charcoal, the cost of hiring people to pick and remove the longan fruit have all increased, while the price of finished longan has dropped so low that it doesn't cover the investment costs. Therefore, this year, I started the kilns 10 days later than in previous seasons; I also stopped buying orchard-grown longan and switched to buying longan by weight, and I only used two kilns."

Mr. Vu Van Minh, from Team 9, Pom Lot Commune, inspects the dried longan fruit before putting it into the drying oven.

Dried longan is primarily sold to the Chinese market. When the Chinese market is restricted, the price of the product often drops very quickly. At the beginning of this year's longan season, traders imported dried longan at around 135,000 - 140,000 VND/kg. However, during the peak season, the price dropped to 110,000 VND/kg. According to calculations, the investment cost to produce 1kg of dried longan is about 80,000 VND (excluding labor costs of the longan processing facility owner), including: 30,000 VND for fresh longan; 30,000 VND for the longan peeling process; and 20,000 VND for charcoal for the furnace. The profit earned is low compared to the costs. Therefore, some processing facilities only produce for the first 15 days of the season instead of a month as in previous years.

Mr. Le Van Tinh, owner of a longan processing facility in Team 1, Pom Lot commune, said: "This year, fresh longan is abundant and the price is low. However, if any processing facility tries to buy the entire orchard , the chances of losses are very high. This is because the sale of dried longan depends entirely on the Chinese market. Currently, the market is stagnant, longan prices have dropped sharply while coal prices are very high. This year, almost every processing facility owner is operating cautiously, not daring to take risks or invest heavily. As for my facility, in previous years we operated all three longan processing facilities at full capacity, but this year I'm only operating two, producing at a more moderate pace than in previous years. The expected longan production for 2023 is about 2 tons."

Low longan prices and an unstable market are causing the longan processing industry in Pom Lot commune to decline in scale and production. Regarding this issue, Mr. Nguyen Van Luyen, Vice Chairman of the People's Committee of Pom Lot commune, said: The longan processing industry has been established and developed in Pom Lot commune for many years. Five to seven years ago, the processing plants were very active, and the products were easy to sell, contributing to increased income for households. However, in the last three years, the number of households participating in longan production has shown signs of decreasing. The reasons are the shrinking area of longan orchards in the commune; fewer traders are buying, and longan prices are low. In addition, in recent years, Son La province has strongly developed its longan orchards, investing in modern factories and production lines, resulting in longan products of higher quality and competitiveness compared to those in Dien Bien.

Residents of Team 1, Pom Lót commune, are harvesting longan fruit to earn extra income at longan processing facilities in the area.

Similar to Pom Lot commune, the longan processing facilities in Noong Het commune are also operating at a reduced capacity. According to preliminary statistics, this year the entire commune has fewer than 10 longan processing facilities in operation, the lowest number in many years .

We visited the dried longan processing facility of Mr. Ha Duy Tinh in Tan Lap village, Noong Het commune. While packaging dried longan, Mr. Tinh shared: “ This year's dried longan season has been really difficult. Besides low prices and high investment costs , my facility is facing many difficulties in hiring laborers to process the longan. The students have all gone back to school or are working; people are not very interested, leading to a shortage of workers. Therefore, this year, I only operate 2 out of 4 longan processing kilns . ”

The limited production of dried longan processing plants has significantly impacted the income of longan orchard owners in Dien Bien district. Ms. Ca Thi Duyen, from Bong village, Noong Het commune, said: " My family has 20 longan trees ready for harvest. In previous years, when the longan trees first started flowering, many people came to inquire about buying the entire orchard or individual trees. However, this year, despite the bumper crop, no one has come to inquire about buying. Therefore, my family has to harvest the fruit ourselves and sell it at the market or transport it directly to the dried longan processing plant. The estimated yield is about 800 kg of fruit, and we have harvested about 60%. Although the harvest is good, the price is very low, only 3,000 VND/kg at the processing plant ; income from the longan orchard this year is lower than in previous years."

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