Discontent brews in coffee industry
|A farmer dries coffee beans in Bao Loc District, Lam Dong Province. With coffee farmers expecting prices to go higher and hoarding their crops, traders are finding it hard to buy enough beans for export. — VNA/VNS Photo Ngoc Ha
HCM CITY — With coffee farmers expecting prices to go higher and hoarding their crop, traders are finding it hard to buy enough beans for export.
Coffee currently sells at nearly VND40,000 (US$1.9) per kilogramme – up from around VND37,000 last month – in Dak Lak Province, the country's largest coffee growing area, and Nguyen Xuan Thai, general director of Thang Loi Coffee Company, said this was higher than global prices.
The director of a foreign coffee export company in Lam Dong Province, who did not wish to be named, said: "It is very hard to buy from farmers now because they think the current price is still low and do not want to sell their crop."
If the situation prolonged, his company might not be able to buy enough coffee for processing, he said.
However, Nguyen Nam Hai, general director of the Superintendence and Inspection of Coffee and Products for Export and Import JSC (Cafecontrol), said hoarding by farmers at the beginning of the harvest season was a good thing.
In the past they used to sell their crops en masse after harvest, dragging prices down, and businesses had had to petition the Government to buy and stockpile coffee to prevent prices from falling further, he explained.
That would not happen this year, he said.
There were concerns that the farmers were taking a risk by hoarding, but it was not too serious since global supply was falling and it was hard to imagine prices falling, he said.
Coffee farmers have so far harvested about 40 per cent of their crop.
The country is expected to produce about 1.2 million tonnes of coffee in the 2011-12 crop, the same as the previous crop. — VNS