|
Coffee export prices take a dive
The export price of coffee has fallen to between 1,600-1,700 USD per tonne, a reduction of 1,000 USD per tonne compared with the beginning of the year, said the Vietnam Coffee and Cocoa Association (VICOFA).
VICOFA consultant, Doan Trieu Nhan, said the decrease was not caused by an imbalance in supply and demand, but was due to the global financial crisis.
Coffee traders are finding it difficult to re-negotiate credit lines with commodities focused banks due to the global credit crunch.
In February, a tonne of coffee sold for 2,500 USD, and the price remained stable until September.
Coffee export volumes have also been falling as key importers Germany , Italy and the United States have bought less coffee in the last few months.
In August, coffee exports to the United States dropped 48 percent, exports to Germany and Italy fell 23 and 22 percent, respectively.
Coffee growers in the central highlands provinces of Dak Lak and Lam Dong are facing difficulty. At the beginning of the year, coffee growers earned around 42,000 VND (2.5 USD) per kilogramme of coffee. The price dove to 26,000 VND (1.5 USD) per kilo on October14. This means coffee growers will lose around 14 million VND (800 USD) per tonne of coffee.
Dak Lak coffee growers are finding this a bitter pill to swallow as they expect the next harvest to be a bumper crop of about 400,000 tonnes, representing a loss of approximately 6.4 trillion VND (400 million USD).
The sector as a whole will lose around 1 billion USD assuming a countrywide harvest of 1.2 million tonnes.
Production costs are also on the increase, putting growers under further pressure. Fertiliser- accounting for around 60 percent of production costs - in particular has become increasingly expensive.
Doan Trieu Nhan, however, said there was still some hope on the horizon. Brazil will set aside 12 million 60kg bags of the 51 million bags expected to be produced in the 2008-9 period, an increase of nearly 150 percent from the 5 million bags stored last period, in an effort to stabilise prices by reducing supply. This would hopefully help coffee farmers worldwide, he said.
Global coffee production is estimated to be 131 million bags a year, while consumption is said to be 128 million bags.
VNA
|
