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It’s hard to break the habit
Like many seafood, farm produce or cashew exchange floors which have been invested with trillions of Vietnam dong and then forgotten by farmers, Buon Ma Thuot Coffee Exchange Center (BCEC) in the Central Highlands city of Buon Ma Thuot seems forgotten as local farmers find it more convenient to trade coffee at the neighborhood market.
In late 2008, Deputy Prime Minister Hoang Trung Hai and many leaders of Vietnam’s commercial and agricultural industries attended the inauguration ceremony of BCEC with the hope that the center would become a standard farm produce trading model for farmers throughout the nation. However, developers of the center, after four months of operation, have admitted that the traditional trading habits of both coffee farmers and enterprises will be difficult to break.
Poor trading volume
BCEC held only two trading sessions in the first quarter with trading volume at tens of tons of coffee. April witnessed better sessions and BCEC has exceeded VND1 billion in 2009 trading value, BCEC director Nguyen Tuan Ha said.
Some members of the coffee forum at http://www.y5cafe.info say that trading values and volumes at BCEC are far below a district level coffee agent who may trade hundreds of tons of coffee everyday in harvest season.
Meanwhile, BCEC, a modern exchange center with huge invested capital funded by the Government and overseas sponsorship, traded only five tons of coffee worth VND125 million at a session on April 8.
Only 15 individuals, mostly coffee traders, have registered to join the floor, a modest number considering the thousands of farms in Daklak Province and hundreds of thousands throughout the Central Highlands. The center has 14 enterprises signed to buy coffee though the province has 140 coffee companies.
The deep-rooted habit
BCEC Director Ha said it would take time to help farmers change their traditional trading habits and use the modern exchange floor. BCEC staff has done their utmost to lure farmers to the center. They have also provided capital assistance, storage and transport for farmers.
Ha admits that the center is a novelty not only to farmers but to BCEC staff and to Vietnam’s commercial industry and difficulties remain.
The old trading habit has the advantage that many traders will bring cash to the fields and pay for the coffee they want. If farmers want to trade coffee at the center, they must produce national quality standard coffee and only district level agents are allowed to process the complicated paperwork that is required for such classification. Many farmers are without transport vehicles to get their product to the center.
“It is not easy to replace the deep-rooted habit of domestic farmers and traders. Despite convenience, the habit has confused the value of coffee due to so many phases,” Ha added.
Large enterprises yet to join the center
BCEC is not selling much coffee. Leading enterprises in the city, like Simexco and Vinacafe Buon Ma Thuot, are not members of BCEC, which is easy to understand as big companies have strong purchasing networks throughout districts and communes. They have no need to join the floor even though BCEC is a modern trading model and is being applied in many developing countries, Ha explained.
Three foreign-invested joint ventures in the province, Man Buon Ma Thuot Coffee Processing and Export Co., Nedcoffee Vietnam Ltd. and the Daklak branch of Olam Vietnam Ltd., have been registered at BCEC since the beginning.
BCEC staff is studying under both local and foreign experts and taking suggestions from both enterprises and farmers to improve operations.
The center has negotiated with Vietnam Technological and Commercial Joint Stock Bank (Techcombank) to provide financial support for farmers if their coffee does not sell.
vietnamnet, sgt
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