"This year there is a bumper crop of litchis," said farmer Tran Anh Tu, "However, if the price stays this low we will suffer major losses." Last year they sold for VND7,000 to VND9,000 a kg, but this year price has plummeted to VND2,000-3,000.

Tu said it would cost more money for harvesting than he would receive from buyers. He claimed that although he and his son had transported 300kg to a wholesale outlet who distribute them country-wide they were unable to sell the fruit and had to accept a VND4,000 price later.

Nowadays along the streets of Kim, My Son, Giap Son and Quy Son in Bac Giang Province crowds of farmers are flocking to sell litchis heaped up on motorbikes and improvised carts lying around in disorderly confusion.

"Litchi prices are getting lower by the hour, from VND2,500 per kg in early morning to VND500 in the afternoon," said Tran Van Luyen. He said that too many farmers were trying to sell their crop at the same time.

"How can we repay our bank loans if the prices stay so low?" Luyen asked, wiping his sweat away while counting his small store of bank notes. Last year he earned VND20million.

Low prices are also disappointing farmers in Luc Nam, Lang Son, and Son Dong in Bac Giang Province. A number of farmers have chopped down litchi trees to grow persimmon next year.

Farmers still waiting

According to deputy chairman of Luc Ngan District People’s Committee, Nguyen Van Tuyen, the bumper crop of litchis caused the price to collapse right from the first harvest. The district has harvested 130,000 tonnes of litchis this year, about 2.5 times more than last year.

Another reason is that traders from mainland China and Taiwan aren’t buying litchis because they also have a bumper harvest. At present, the district has had only three Chinese wholesalers compared to 30 last year.

Director of Bac Giang Province’s Agriculture and Rural Development Department, Nguyen Van Liem, also believes that the small number of local companies involved in processing litchis has compounded the problem.

"The whole province has seven processing companies who only purchase 4,000 tonnes a year. He added that these companies were still using obsolete equipment with limited capacity, and were therefore unable to increase their orders and take advantage of the glut.

The district people’s committee has encouraged farmers to dry their litchis if the price lowers over the next 5-7 days. Yet, many believe that the suggestion is not a solution since they still must pay for coal and harvest labourers. "Who can say for sure if dried litchis prices will not also decline," a householder asked.

In the southern province of Can Tho the price of litchis is also falling quickly, to VND8,000-10,000 per kg at present from VND30,000 earlier.

A shop owner, Ngo Van Duoc, said that prices started falling over a week ago and explained lower prices were a result of reduced transportation costs. Traders used to transport litchis by plane but now use cheaper refrigerated lorries.

In the meantime many farmers are suffering from catastrophic financial losses from which some may never recover. Many will now be forced to seek alternative cash crops, which may increase indebtedness. It is ironic that bumper crops can lead to bankruptcy