#100Days [002] Lemongrass Price vs. Bigger Business Opportunity

Selling lemongrass. The work that I am doing now in an agriculture cooperative is to people to buy lemongrass from our members. For the last one week, we have sold one of our members' lemongrass, farmer A, 30kg a day to a collector in a local wet market near by. He pays us 700 Riel for 1 kg. We decided not to negotiate the price with him yet, because we want to build relationship with him and let him know we want to work with him long term.

Today I called another member, farmer B, to ask if she has lemongrass to sell. She asked about the price, and I told her the collector buys in 30kg everyday for 700 Riel per kg. She was surprised, and told she used to sell to him also for 1,000 Riel per kg. I was also surprised when I heard that.

Now we know that he used to sell to others at 1,000 Riel per kg, just a couple days ago. That's what farmer B told me. I am not sure if that's true, because why hasn't she brought him lemongrass everyday since then? Also, she only sold it in smaller amount like 18-19 kg (គាត់លក់រាយរងទេ ដោយសារគេត្រូវការដែរគេទិញទៅ). To sell in huge amount maybe it would be different.

Our intention is to find buyers that give us good price for our members' lemongrass. And the objective for now is to study the collector we work with to potential collaborate in a bigger business of collecting lemongrass and selling them in Phnom Penh. We are looking at a bigger picture. However, our member, farmer B, seems to be looking for a higher price not an opportunity to do business in a bigger scale. That's why she went out to sell the lemongrass to collector herself. We as a community can't control or know what every member think or does.

It seems difficult to negotiate with him to increase the price. He keeps explaining to me that he can't give more than 700 Riel during this time of the year because there're plenty of lemongrass. He just tries to keep the transaction going everyday so that there's lemongrass being bought and sold.

A voice in my head question if he's really honest about the price situation with us or if he's only trying to take advantage of us? But I did witness his wife, a vegetable seller, complaining about not being able to sell all the lemongrass, and I saw the left over lemongrass.

As a collector, I think they prefer to work with a producer group other than individual.

What to do now?

I feel like if it were just me growing and selling vegetable by myself, I for sure could focus on selling directly to retailers for better price then selling to a collector. But when we work as a producer group, the dynamic is different. It requires a lot of information gathering, facilitation, negotiation, and communication.