First Enterprise in Vietnam to Build Safe Coffee Production Area

Thang Loi is one of six coffee producers nationwide to have the honour of receiving a certificate of product meeting the standard "Vietnamese agricultural and forestry quality products and trade prestige in 2007" offered by the Ministry of Agriculture and Rural Development. The Company specialises in growing, processing and exporting quality coffee finished products. The Company’s products have the credit, quality and brand as a favourite of many foreign importers, particularly from Japan.

 

Mr Nguyen Xuan Thai, the Company’s Director, said: With the tradition of the leading state-owned coffee producer in the province, the Company has grown more than 1,000 hectares of safe coffee; following precisely the process of special cultivation and reaping; investing in advanced processing equipment to guarantee quality coffee; improving the Company’s competitiveness in the international market. The Company has incorporated technical advances in production and business, put down micro-organic fertilizer in an appropriate proportion to enrich the soil that helps grow the coffee garden and provide high productivity and quality.

 

During the harvest season, the Company picks more than 95 per cent of ripe beans. The entire output is to be processed under the Brazilian wet processing technology. Therefore, finished coffee beans provide better quality than dried processed products and the value is also 5 to 7 per cent higher.

 

The Company has opened a workshop processing quality coffee powder called COFFEE VICTORIA with output of 500-800 tonnes a year. At present, this product is consumed in great quantity domestically, in China and Korea.

 

In the 2007-2008 crop, coffee export turnover of Daklak province has obtained US$600 million, the record high ever since, contributing to the national historical export turnover value of more than USD2 billion. Unfortunately, in the next crop, the coffee industry is predicted to face many difficulties.

 

Mr Nguyen Xuan Thai said the weather this year was quite abnormal. There was much rain in both blossom period and harvest season that made bad impacts on coffee output and quality. Meanwhile, coffee price was on a slide. If price of Robusta coffee traded on the London exchange reached the record high level over the past 15 years to USD2,900 a tonne in March this year, now it falls by nearly half to US$1,500 a tonne. Drop in world coffee price pulls down the domestic coffee price. In Daklak, coffee price stands around VND22,000-23,000 a kilogramme, down nearly a half compared to the price in six previous months. Such plunge has pushed coffee producers and traders in Daklak province into miserable situation. Exporting companies also face problems from customers as most present exporting contracts follow foreign forms, so the Vietnamese enterprises have to bear most downward price risks.

 

As a consequence of the global financial crisis, many coffee importers encounter financial difficulties leading to delayed payment, no payment, even rejects. Some enterprises though signing contracts with high price still incur considerable losses as customers refuse to receive the shipment when coffee price falls. Therefore, companies hope that the Government will offer special policies on the coffee industry, such as helping farmers to stabilize production, assisting in loans, buying coffee at rational price to avoid price pressure from private dealers; outline strategic directions by proposing specific solutions to facilitate the coffee industry, and pay more attentions to local enterprises.