Vietnam considers joining big exporters to stop coffee price slide

08:07 | 20/04/2015 Trade

The Ministry of Agriculture and Rural Development (MARD) said it is considering cooperating with the world’s coffee metropolises to halt the drop in coffee prices, because “inner strength” alone will not help.

Vietnam considers joining big exporters to stop coffee price slide

Farmers in the Central Highlands are worried because of the prolonged spell of dry weather, the most serious in the last 10 years.

Nguyen Van Kien, a farmer in Dak Lak province, said he has had to water coffee fields for the third time this year. In the years before, once or twice was enough. 

Kien complained that he has to spend tens of millions of dong for every irrigation campaign, while the coffee price has been decreasing dramatically since the beginning of the year.

“The price has dropped to VND35 million per ton from VND42 million per ton in late 2014,” he said. “Both the hot weather and the price fall made us suffer.”

The Vietnam Cocoa and Coffee Association (Vicofa) estimated that Vietnam may lose 20% of output in the 2014-2015 crop because of the long spell of dry weather.

Meanwhile, contrary to predictions that the coffee price would continue rising in the first months of the year, the price has dropped to its deepest low.

Since the domestic price has fallen to below production cost, Vietnamese farmers have to kept coffee at businesses’ stock. Businesses have paid 70% of coffee value to farmers and will export coffee when the price bounces back to VND40 million per ton.

A report showed that the stock volume has reached 400,000 tonnes. 

According to the General Department of Customs, only 350,000 tonnes of coffee were exported the first quarter of 2015, just half of the exports of the same period in 2014.

Cooperating with other exporters 

MARD’s Minister Cao Duc Phat, noted that the domestic coffee price and Vietnamese farmers’ profits heavily depend on the world market supply and demand. 

Therefore, domestically applied measures alone will not help improve the situation.

“Nothing will change if you sit at home and complain about price decreases. If Vietnam acts single-handedly, it will not be able to stop the price slide,” Phat said.

He said Vietnam is considering cooperating with Brazil, Colombia and Indonesia and discussing measures to improve the situation.

If Vietnam, which puts out 26 million bags of coffee a year, for example, joins hands with Brazil, with 45 million bags, the two countries alone would control 60-70% of the global coffee output. 

Phat urged Vicofa to contact coffee associations in other countries and discuss cooperation solutions. After that, Phat and Vicofa will have working sessions with the countries’ officials for political commitments.

                                                                                                                                                                       Source VOV News