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State to buy coffee to support price
The Government has approved a plan to temporarily stockpile 200,000 tonnes of coffee to stabilise the export price, according to the Viet Nam Association of Cacao and Coffee (Vicofa).
At the start of this year, the coffee export price plunged 15-25 per cent to US$1,210 per tonne compared with the same period last year, Vicofa said.
Viet Nam harvested almost 1 million tonnes of coffee in 2009-10. Traditionally, coffee exports soar in the first and fourth quarters of the year. However, last year, domestic consumption slowed and growers were left with 600,000 tonnes of unsold coffee on their hands.
In the first two months of this year, the country exported 280,000 tonnes of coffee, worth $411 million – a drop of 26.78 per cent in volume and 12.52 per cent in value against the same period the previous year.
The association asked the Goverment to introduce preferential policies to boost profits, said Luong Van Tu, the association chairman.
In the long term, the Buon Ma Thuot Coffee Exchange Centre plans to offer term transaction services for coffee, as is done on trading floors in London and New York.
Nguyen Tuan Ha, the centre's Director, said the trading floor would stabilise the domestic coffee price and meet the industry's long-term goals.
The Ministry of Agriculture and Rural Development (MARD) plans to keep the country's total coffee cultivation area at between 450,000 and 500,000ha, with an average output of 2 or 2.4 tonnes per ha.
Officials said that by limiting the cultivation area, the ministry hoped the domestic and export price of coffee would remain stable.
Over the past few years, oversupply has led to a drop in the world market price. Last year, the industry produced about 960,000 tonnes, up 6,300 tonnes compared with 2008. This year, it expects to produce between 1.08 million tonnes and 1.26 million tonnes.
In 2009, the country exported 1.18 million tonnes of coffee, up 11.71 percent on the previous year. However, it earned just $1.73 billion, down 18.03 per cent.
Industry insiders said oversupply and poor quality had driven the price down.
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