6. OPERATORS’ PERCEPTIONS OF THE CURRENT FISH MARKETING SITUATION

6.1 Main difficulties faced

The responses to the question “what are the three main difficulties you have encountered in selling your catch”, show first that about half of the replies of the interviewed fisherfolk in the north indicate no such problems. However, low prices and fluctuation of prices are frequently mentioned as problems, more so in central and southern Viet Nam where lack of market information was seen as another major problem. The lacks of product collection services are referred to in central and southern Viet Nam whereas poor infrastructure was indicated in the centre and the north of the country.

Only a fifth of the replies of the aquaculturists indicate “no problems” (all in the north) whereas unstable and low prices are mentioned most frequently as the main problem in selling products along with lack of market information. To a lesser extent (one fifth to a third of the replies identify the limited number of buyers and no or low local demand as main obstacles. These are indicated somewhat more frequently in central Viet Nam than in the rest of the country.

Wholesalers in the north mention capital shortage, poor infrastructure and low selling prices as the main difficulties in current business: low selling prices, high prices of raw material and high competition are the main factors mentioned by the wholesalers in central Viet Nam and capital shortage, high competition, poor infrastructure and low selling prices by those in the south.

As the main difficulties in current business of the processors in the north are mentioned lack of markets for their products, high competition and shortage of capital; operators in the centre of the country refer to price fluctuation, unstable raw material supply and shortage of capital, those in the south to unstable raw material supply, price fluctuation and to a lesser extent to high competition and lack of output markets as main problems.

The difficulties identified by retailers are low selling prices, high prices of raw material, capital shortage and poor infrastructure in the north, high competition, low selling prices, high prices of raw material and capital shortage and natural disasters in the centre and high taxes and fees as well as capital shortage in the south. Almost half of the replies of the retailers in the south refer to high taxes and fees, but only one fifth in the north and one-third in the centre. Only just over 20 percent of the replies in the south identify low selling prices and high price of raw material as main difficulties. The replies of the retailers in the big cities identify low selling prices as the main problem in Hanoi (82 percent), but high competition (63 percent) in Danang and HCM City. Poor infrastructure was frequently mentioned in HCM City whereas high prices of raw material was the second factor mentioned in Hanoi and Danang. High taxes and fees are perceived as problems mainly in Danang (42 percent) and somewhat less in Hanoi (31 percent) and HCM City (28 percent).

For the institutional buyers the high prices of raw material appear to be the main concern (49 percent of the replies in the north and the south, but 77 percent in the centre), followed by high competition and inconvenient location. A substantive number of replies points to taxes and fees as difficulties (around 30 percent with some variation between north and south). A relatively high number of replies indicate unstable fish supply as a major problem in the centre (40 percent).

Summing up the main difficulties it may be concluded that the producers identify prices and lack of market information as the main obstacles preventing them from doing better business. Selling and purchasing prices combined with strong competition, capital shortage and poor infrastructure are the concerns most frequently mentioned by wholesalers; this was similar to the situation described by processors which however, also point to unstable raw material supply and lack of output markets. Prices and competition are negatively perceived factors by retailers, together with shortage of capital, too many taxes and poor infrastructure.

The complementary questions, “What are the three main expectations to improve your product marketing” (or “current business” in the case of the traders and processors)? show that fisherfolk counts very much on price and market information (three quarters of the replies, very high numbers in the centre and still above 50 percent in the north). Other improvements are expected from the establishment of fish collection services and fish wholesale markets as well as selling under contracts. The preferences expressed by aquaculturists follow a similar pattern; however, there was no mention of fish collection but the availability of suitable policy was expected by two thirds of replies.

Wholesalers indicate that they expect (or hope for) stable supplies to improve business and to a lesser extent that market information will help improving business, both in the order of magnitude of about two thirds of replies with differences between north (stronger on market information) and south (stronger on stability of supplies). Improvements of market infrastructure and facilities (wholesale markets and transport) are also mentioned by many with some higher emphasis in the north and the centre. Less than 10 percent expect a reduction in taxation or improved credit and capital situation as contributions to better business.

Stability of product markets and of raw material supplies are the main expectations of the processors for improving their business; there was a clear emphasis in favour of stable output markets in the north and centre and in favour of stable raw material supplies in the centre and the south. About 50 percent of the replies mention market information as expected improvement a level similar to having sufficient capital.

Over two thirds of the replies by retailers identify stable supplies as the main expectation for improving their business and more than half refer to market information; and almost half say they expect that product safety will improve. About one fifth of the replies express the expectation that fishery product information may become available, which would support traceability of the products. Technical improvements, for example fish wholesale markets and better transport, each appear in over 20 percent of the replies and both mentioned more frequently in the north than in the south of the country. Retailers operating in Hanoi and HCM City refer to improved transport more frequently than the regional average. Less than 10 percent of the retailers interviewed in the south mention that they expect an improvement of the credit and capital situation or a reduction of taxes and fees (no mention in the other regions).

Safety of products was the main improvement expected by institutional buyers, throughout all regions around 55.6 percent of replies. Stable supplies mention 22 percent in the north and 52 percent in the south as desirable to improve the business and with regard to new cooking techniques the differences are 62 percent in the south and 39 percent in the north. This contrasts with the need for market information for improving business which was mentioned in 47 percent of the interviews in the north and in 26 percent of those undertaken in the south.

On the whole, stability of supplies and technical and market information are the main aspects considered necessary for improving business of the operators.

6.2 Main factors for increasing profits

A specific question with regard to profits was addressed to fisherfolk, aquaculturists, retailers and institutional buyers. Aquaculturists were also asked to rank these factors. There are some small differences in the English version of the question which may be standardized as “What are the three most important factors that will increase your profits?” The question was put open-ended without suggestions for replies (as was the case in the questions analysed under chapter 5.1). The interviewer had three lines at disposal for filling in up to three options. Total possible replies were (number of interviews N+C+S) times three options:

Fisherfolk interviews show high (above 50) mentions referring to product technology (higher value and quality products, product diversification and similar), reducing costs and increasing productivity, investment in boats and gear and stable or higher product prices as main factors for increasing profits. Stability of access to fishing grounds was indicated less frequently as are straight production increases. Improvements of marketing infrastructure and equipment were mentioned only in the centre and the south. It was important to note that about one-quarter of the nominations in the south indicate the need to reduce fuel prices as a major factor for increasing profits. Rather seldom were mentioned market information, tax reduction, export production and government support.

Summarizing the replies of the fisherfolk expects improvement of profits in the post-harvest area despite the 44 references in the south to the need for the reduction of the fuel price, which would reduce production costs.

The replies of the aquaculturists give a strong preference to improvements to be achieved in the sphere of production technology and costs which compared to the marketing and product factors mentioned amount to about double in numbers. This distribution was similar in all three regions. The replies relating to expected improvements in the financial area (capital, investment) was similar for fisherfolk and aquaculturists (60-70).

For retailers the main factors are stability of markets and prices which was comparable to the nomination of product quality criteria indicated; however there was a clear distinction between north and south with stability more frequently referred to in the north and product quality more in the south. Customer relations are mentioned slightly less frequent but again they are given more importance in the south. In addition there are a few references to reduction of costs in the north and to working capital needs in the south.

6.3 Priorities for improvement action

Each category of operators had been asked to answer an open question (without reply options indicated) regarding their intentions for action aiming at improving the current business (or to improve their marketing in the case of producers). The purpose of this question was to identify the awareness of operators, firstly, whether there were problems or need for action, and secondly, what they considered useful/necessary remedies in their specific economic and business situation.

The replies given by fisherfolk show a relatively high proportion of “no need”, “no idea” or no reply at all (97 of the 325 replies noted). The indications of concrete measures which are considered useful solutions for improving sales are largely in the marketing process and infrastructure field (137), followed by improvements in the production sphere (cost reduction, organization of catch collection and similar). Catch collection can of course also be considered a marketing function, which may be performed, by assembly traders or other pertinent arrangements. Increased consumption, credit facilities and government support are mentioned but at much lower frequencies (around 20 times each).

Do not know, no need or no reply was the reaction of about 20 percent of the aquaculturists reaching a quarter of the results in the north and the south respectively. Improvements of the marketing system, whether in marketing operations, infrastructure or information were the majority of the suggestions (262 of 507), followed by action related to the production side (67, e.g. fingerlings). A smaller number mention government support (42) and a few point to credit and investment as bottlenecks in their situation (14).

In the view of the wholesalers, of which the majority does not provide any positive indication (236 of 373), also the marketing related solutions were the more prominent ones followed by interventions in the field of credit and investment (77 and 50, respectively). Only a few saw production as the solution to improve their current business (10) and none mention support from government.

The picture changes significantly in the replies of the processors. Out of the total of 133, 38 indicate that they had neither need nor knowledge on how to improve their current business, but a relatively high number mentioned production related measures (21) and 41 refered to marketing. Capital and investment were also more frequently referred to with a total of 33. Here it was noted that the latter was mentioned only twice in the north but 11 and 20 times in the central and southern regions of Viet Nam.

Also in the case of the retailers there was a high number of those which did not see a need or know or did not reply (252 of 402). Most of those who provided a positive suggestion point to marketing (88) followed by credit, capital and investment related aspects (45). Only a few saw a need for improvements on the purchasing side. None called for government support.

The replies of the institutional consumers (153 in total) refered mostly (82) to marketing improvement, including several to training of staff. No idea or no need was the reaction of 47 and investment (better premises) was proposed by 17. Very few pointed to action related to purchasing (4) and by government (3).

In conclusion, it was evident that a large proportion of the producers and of the operators or agents in the marketing system did not see a need to or knew how to improve their marketing or business in general; however those that saw limitations point to the marketing field. As may be expected, the production area was relatively important for the producers but does not reach the frequency of the references to the marketing aspects. It may be mentioned that for some groups, government intervention and support was important, but again to a lesser extent than other aspects. The importance of credit and investment related shortcomings varied between the groups and would seem to merit attention as well in a future program. Although the addition of the replies by the different categories cannot claim to present anything like a representative picture for the fish production and marketing sector in Viet Nam, it provided an indication of the relative importance of the various fields which were said to merit improvements. Marketing received 723 indications, production or purchasing 151, credit and investment 182 and government support and policy 60. It should be kept in mind as well that those interviewees which provided a positive or explicit reply could be expected to be more active or concerned about their own business and the needs and possibilities for improvement action than those which felt to be at a loss with the question. Perhaps an analysis of the exact meaning of question and answer in Vietnamese can provide additional insights.