Coffee Crop in 2005 Likely to Face 30 per cent Failure Rate, Says Vicofa
According to Vietnam Coffee and Cacao Association (VICOFA), the drought that began in September 2004 in the Central Highlands would reduce the coffee crop by 30 per cent. VIB Forum interviewed Mr Doan Trieu Nhan, VICOFA Chairman on issues related to the Vietnamese coffee market.
What do you expect coffee output to be this year?
If the drought that began last September continues without rain in the Central Highlands, Vietnam coffee output this year may decrease by 30 per cent. The paradox confronting Vietnamese coffee is that prices will rise but output will drop. Arabica and Robusta coffee beans are some of our strong export items. Arabica coffee beans in Nghe An and Son La provinces are of exceptional quality. However, to ensure stable economic development, in addition to coffee, Vietnam must also develop other products such as pepper, cashew-nut, and cacao.
How does the world market view Vietnamese coffee in regard to quality and competitiveness ?
In recent years, Vietnam recorded a high growth in coffee output. According to our statistics, last year, Vietnam exported over 680,000 tonnes of coffee valued at USUSUS$560 million. Some foreign statistics have even put it at over one million tonnes. Vietnamese coffee has the comparative edge of high quality and low production cost. Vietnam has developed State standards on export coffee and this is implemented in foreign trade. The international consumers association has also advised Vietnam to participate in more international standards on quality and food safety. I believe that with those standards, Vietnamese coffee will occupy a higher position in the world market.
What is the present transaction mode and do you see any difficulties ahead for the Vietnamese coffee sector?
In addition to our traditional mode, Vietnamese businesses wish to participate in world e-commerce transactions such as is the case in New York and London. Recently, in co-operation with REFCO (member of Liffe - London) and Techcombank, Vietnamese coffee enterprises joined transactions after solving some technical, professional and financial problems. However, with big export volumes, the traditional mode will continue for some time. The strength of Vietnam is its big reserve of coffee for export. But it lacks proper financial resources and market analysis. Vietnamese businesses don't make good use of market information from Reuteurs to make correct business decisions.
How can the Association assist coffee businesses?
The association serves as a bridge between the State and enterprises, counselling related authorities in the interest of businesses. The association will also organise training courses with local and foreign experts. In particular, the association will help enterprises in networking for international transactions.
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