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Coffee brews up big profits

Update: November, 13/2007 - 00:00

Coffee brews up big profits


Exports are likely to earn $1.8 billion this year, far beyond previous projections, but poor quality is still leaving a bitter taste.

The Ea Sim Coffee Co, a susidiary of the Vietnam Coffee Corporation, has allotted arable land to worker families on a contract basis to improve management. As a result, they have harvested a record yield of more than three tonnes of coffee per hectare from 1,440ha. — VNA Photo Dinh Na

HA NOI — Coffee exports are expected to reach US$1.8 billion in 2007, well over earlier targets for the year of $1.5 billion, according to the deputy chairman of the Viet Nam Coffee and Cocoa Association, Doan Trieu Nhan.

Exports this year have already surpassed the target, hitting $1.55 billion so far, Nhan said.

With shipments of a million tonnes to date, coffee is the nation’s leading agricultural export this year. As much as 50,000 tonnes were exported in October alone, earning $86 million, up from 39,000 tonnes and $49 million in export value in October a year ago.

Nhan attributed the impressive achievement in part to price hikes in coffee on the world market. Despite a surge of only 43 per cent in volume year-on-year, export value rose 84 per cent.

"Coffee export prices rocketed to $1,800 a tonne in September, the highest in the past nine years," said Nhan.

The Viet Nam Coffee and Cocoa Association forecasted that prices would continue to jump due to lower yields in Brazil, Viet Nam’s leading rival among global coffee producers, but cautioned that pests could reduce Viet Nam’s coffee output this season by 10-15 per cent.

Despite the high value, the price of Vietnamese coffee has remained roughly $50-$70 per tonne lower than that of other leading coffee suppliers around the world due to poor local harvesting techniques, causing a substantial amount of the nation’s coffee to fail to meet international quality standards.

"Local farmers still get into the habit of harvesting both ripe and unripe coffee beans," said Nhan. "The country’s drying and processing practices also remain backwards."

Nhan expected that the shortcomings would soon be addressed as the country applied new coffee quality standards next year.

The new specification, coded TCVN 4193:2005, replaces the old standard contained in TCVN 4193-93, will regulate humidity percentages equal or less than 12.5 per cent and provide that premium and grade 1 arabica cannot contain robusta.

According to the Ministry of Agriculture and Rural Development, export markets for Vietnamese coffee remain stable. Germany was the largest importer, consuming roughly 14 per cent of the country’s total exported coffee, followed by the US, Italy, Spain and Sweden. — VNS

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