Recent forecast that Vietnam’s coffee output in the 2006-2007 crop year is likely to rise by 30 per cent on-year to 13.8 million 60-kilogram bags thanks to good weather conditions have already sunk the prices of Vietnamese coffee in the global market.
The price of Robusta coffee beans fell by US$60 to US$1,160 per ton in the past few days, alarming some domestic merchants, according to the Vietnam Coffee and Cocoa Association (Vicofa).
Analysts, meanwhile, believe that fluctuations on international markets had not yet affected most coffee growers and traders in Vietnam, where just 40,000 tons of coffee remain in stock.
July is the end of the coffee crop, and coffee stocks held by farmers are low at around 40,000 tons. Most coffee was sold quickly in June when coffee price climbed to US$1,200-1,280 per ton.
However, falling prices have led to losses for online-dealers, including around 10 offices trading coffee online in central highland Dak Lak province. These offices gather several dozen dealers each, who are now incurring serious losses.
Huy said that only very experienced businessmen could make deals on the futures markets. Many dealers lack experience in modern trading floors and poor financial backing before joining the market, and as a result they are suffering losses.
Dak Lak province, the country’s largest coffee growing area, currently has 166,000 hectares of coffee under cultivation, supplying roughly 300,000 tons of beans each year, said the association.
The province is now calling on investors from all economic sectors to invest in the establishment of four new coffee processing plants in key growing areas in Krong Pach, Krong Ana, Krong Buk districts and Buon Me Thuot City, each with an annual production capacity of 5,000 tons.
Buon Me Thuot City is already home to a dozen coffee producers, including well-know companies like Trung Nguyen, An Thai, Thanh Bao and Buon Me Gout.
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