Agriculture ministry seeks to curb coffee price drops

Source: Pano feed

Thuy Dung


Farmers collect coffee fruits in the Central Highlands region. Vicofa forecasts that drought in the Central Highlands and central regions could lead Vietnam’s coffee yields to plunge by 20% in the 2014-2015 crop - PHOTO: TL

Farmers collect coffee fruits in the Central Highlands region. Vicofa forecasts that drought in the Central Highlands and central regions could lead Vietnam’s coffee yields to plunge by 20% in the 2014-2015 crop - PHOTO: TL



Coffee prices on the local market have dropped to VND38 million a ton from VND42 million late last year, said Nguyen Nam Hai, vice chairman of the Vietnam Coffee and Cocoa Association (Vicofa).


“The price movement is in stark contrast to forecasts earlier that the price of coffee would pick up in the first months of this year,” Hai said.


Hai attributed the coffee price fall to the oil price plunge and strong appreciation of the U.S. dollar on global markets. “These have led to lower prices of many agricultural products, including coffee,” Hai commented.


The shrinking price has forced farmers to have more beans stockpiled at the warehouses of exporters with total inventories estimated at 400,000 tons currently. This is one of the main reasons why Vietnam’s coffee exports in the first months of this year were low.


Statistics of the General Department of Customs showed Vietnam shipped nearly 700,000 tons of coffee in the first quarter of 2014 but only 350,000 tons in the January-March period of this year, down a staggering 41.4% in volume and more than 37% in value.


The price decline has made life tougher for farmers as they have had to spend more on coffee production this year due to drought that has wreaked havoc on the agricultural sector in many parts of the central and Central Highlands regions.


Farmer Nguyen Van Kien in the Central Highlands province of Daklak, the biggest coffee producing area of Vietnam, said he has had to water his two hectares of coffee for three times in this dry season, or one more time than the same period last year.


“Scorching weather and falling coffee prices have made it more difficult for farmers to cope with the impact of drought on their farms,” Kien said and added that the price of coffee once slid to VND35 million a ton.


The drought, which is reportedly the worst in a decade, could cause Vietnam’s coffee yields to plunge by 20% in the 2014-2015 crop, said Hai of Vicofa.


Minister of Agriculture and Rural Development Cao Duc Phat said solutions deployed by Vietnam alone will not help ward off dropping coffee prices as they are affected by many factors on the global market.


The ministry plans to work with Brazil, Columbia and Indonesia on measures to help recover the price of the commodity.


Phat said Brazil can produce 45 million bags of coffee, while Vietnam’s yields are around 26 million bags (of mainly robusta coffee). “These two countries account for 60-70% of the world’s coffee output,” Phat noted.


Therefore, Phat requested Vicofa to contact its counterparts in the countries to discuss cooperation before leaders of the ministry and Vicofa make trips to these countries to sign commitment agreements.


Meanwhile, coffee growers are looking for financial support to replant coffee and improve yields of their farms.


Kien said that he took out bank loans with an average annual interest rate of 12%, or five percentage points higher than that endorsed by the Government for prioritized sectors, including agriculture.


Vicofa proposed that farmers should be provided with low-interest loans for their coffee replanting projects and technology application in order to improve their yields.


Vo Minh Tuan of the credit department at the central bank said the Prime Minister has approved a national coffee replanting program and the central bank is expected to send to the Vietnam Bank for Agriculture and Rural Development (Agribank) a document by the end of this month ordering the lender to provide farmers with loans with low interest.


Some 120,000 hectares of coffee will be replanted in the Central Highlands region between 2014 and 2020 in line with the program, which costs at least VND12 trillion (US$555.4 million).


As of end-2014, Vietnam had had 641,000 hectares of coffee, mainly in the Central Highlands and southeastern regions, the south and north of central Vietnam, and the midland of the northern mountainous region. The total number comprises of 86,000 hectares of over-20-year-old coffee and140,000 hectares of 15-20-year-old coffee.




Đăng ký: VietNam News