Vietnam coffee export forecast to fall 40%
By Ngoc Hung - The Saigon Times Daily
HCMC – Vietnam expects to reach about US$1 billion in coffee export value this year, down 40% against 2009, given low export prices, said Do Ha Nam, vice chairman of the Vietnam Coffee and Cocoa Association.
Vietnam’s coffee output in the 2009-2010 crop dropped 20-30%. Sale prices fell too. “Although coffee prices in the Central Highlands have dropped strongly, enterprises cannot purchase coffee due to capital shortage,” Nam said.
Vu Duc Tien, director of Tay Nguyen Coffee Investment and Import-Export Joint Stock Co., said the enterprise was able to borrow VND400-500 billion from banks in the past to buy coffee. However, that figure has been reduced to just VND100 billion this year, Tien said, and the company would have to borrow an additional US$50 million from other sources.
Meanwhile, foreign enterprises have flocked to the region to purchase cheap coffee in bulk.
“Within the next few years, local coffee enterprises may not be able to compete with foreign firms given the current situation,” Nam said. He also expected coffee prices would plunge to VND3,000-4,000 per kilo in the future.
Coffee prices on the London market have continued to decrease too although local firms have boosted buying power to lift prices.
Foreign investors have estimated Vietnamese firms’ coffee reserves and sought methods to keep the prices down.
The association earlier suggested subsidized loans from the Government to purchase 200,000 tons of coffee. The move would support local enterprises and more than five million coffee farmers in the region.