Coffee Prices in Vietnam on Further Rise

Coffee Prices in Vietnam on Further Rise

Coffee bean prices in the central highlands province of Dak Lak, Vietnam's largest coffee growing area, after reaching a level unseen for five years, on May 27 continued to rise further to around VND17,000 a kilo, up by VND2,000 a kilo against late April this year¸ coffee traders said.

Meanwhile, coffee export prices also stood high at US$1,090 a ton of 5 per cent broken grade two, FOB Saigon Port basis, up by US$86 a ton against last month and by US$10 against last week.

This the highest price for several years and Vietnamese farmers are hoping the index will be up to around VND20,000 a kilo, they said. (US$1=VND15,814).

Van Thanh Huy, chairman of Vietnam Coffee and Cocoa Association (Vicoafa), said the coffee prices would remain high in Vietnam. “Coffee prices in the world market still keep rising. In London, coffee prices will probably rise to US$1,200 per ton against the current US$1,177 per ton.

Vietnam represents a large proportion of the world’s output of robusta coffee. The earlier news about the country’s loss in the last coffee year and low output in the next year had great impacts on the world market, pushing up coffee prices.

Vicofa earlier estimated that output of the coffee year 2004-2005 would total around 750,000 tons but international importers thought the figure would be 900,000 tons. Importers thus tried to lower prices. However, a very small volume of coffee was left when only around 600,000 tons was exported. “It is estimated that there was around 100,000 tons of coffee bean in farmers' stockpiles,” Huy said.

Farmers sold most of their coffee to have money to combat the drought. Enterprises did not dare to get banking loans to buy coffee on speculation. At the national conference on coffee in June last year, Vicofa and the Ministry of Trade agreed that coffee enterprises would coordinate with banks to deliver loans to farmers to store coffee to wait for higher prices.

Vietnam, the world’s largest robusta coffee exporter, shipped around 423,000 tons of coffee worth US$311 million in the first five months of this year, down 13.2 per cent on-year in volume and 4.5 per cent on-year in value, according to the Government Office Statistics.

VNS