| |
Coffee
prices lift Vietnam spirits
By Tran Dinh Thanh Lam
HO CHI MINH CITY -
The improvement in the prices of coffee beans is giving
hope to Vietnamese farmers who have suffered steady
losses over the last five years. Coffee growers faced
lean times last year as oversupply on world markets saw
prices plunge.
But Vietnam's coffee growers say
their fate is changing thanks, in part, to a campaign by
Oxfam America. Oxfam is calling for the adoption of a
new plan put forward by the International Coffee
Organization to take some lower-grade beans off the
market, and for the top four coffee-roasting
multinationals, which dominate the world market, to pay
a fair price for the beans.
Oxfam said world
coffee prices are at a 30-year low because 8 percent
more coffee is being produced than consumed.
Multinational coffee companies are making large profits
by charging consumers in rich countries 1,500 percent
more than farmers in poor countries are paid for their
beans, the organization said.
Coffee prices on
the world market average US$1.10 a kilogram, while
production cost is around $1.76.
"The worst may
be over for embattled coffee growers like us, with
prices finally rising off record lows," said Nguyen
Trong, owner of nearly 20 hectares of coffee plantation
in Dak Lak province in the country's central highlands.
"The surging prices are due to the increase of
coffee prices in the world market and the decrease of
the country's coffee output," said Doan Trieu Nhan,
chairman of the Vietnam Coffee and Cocoa Association
(Vicofa) .
He added that the increase of coffee
prices in the world market could be seen as early signs
that Oxfam's campaign to tackle low prices is working.
"The Oxfam scheme is positive as it truly reflects the
current coffee market situation, taking into account the
livelihoods of farmers and producers," Nhan said, adding
that Vietnamese coffee growers have heartily welcomed
the campaign.
For farmers who have made the
switch from farming low-grade Robusta bean to high-grade
high-yield Arabica, the investment is now beginning to
pay off. But for many others who still farm low-grade
beans, the pick up in world coffee price has still some
distance to go before they see their fortunes turn
around. Vietnam is today the world's second largest
coffee grower and the largest grower of Robusta.
"Farmers in developing countries such as Vietnam
are now selling their coffee beans for much less than
they cost to produce, and they deserve more of the
industry's profits," Nhan said.
The 2001-2002
crops have recorded the highest output ever reached in
Vietnam, but coffee prices were on average half of those
of the 1999-2000 crops. Although production rose 40
percent, export turnover is less than 70 percent of the
1999-2000 crops.
The ministry of agriculture and
rural development has offered coffee growers extra
funding and exemption from paying land-use taxes. But
growers in the largest coffee-producing province,
Daklak, say the industry's problems can only be solved
if bean prices rise above production costs, which
currently stand at $530 to $600 per ton. Hit by a
worldwide drop in coffee prices, Vietnamese companies
are exporting coffee at $300 per ton, which means
farmers are getting an even lower price when export
companies buy their coffee.
This has led to
accusations from other big coffee producing countries
that Vietnam's cheap coffee is one of the reasons for
the downturn in world coffee prices. In the past decade,
Vietnam has become one of the world's largest coffee
exporters and the largest producer of low-quality
Robusta beans, and for this reason rival coffee
producers point to Vietnam's growth in Robusta exports
as triggering the world price fall.
To save the
failing coffee market, Oxfam has called on coffee
companies to pay farmers a higher price for their crops
by reducing the supply and stocks of coffee on the
market. Oxfam is also asking for the creation of a fund
to help poor farmers shift to alternative crops and
livelihoods.
"Governments, companies and
producers should manage the market to ensure supply does
not overshoot demand and support producers to process
their crops so they get more money, ” said Oxfam in its
report, Mugged: Poverty in Your Coffee Cup, released
last month.
According to Oxfam, 25 million
families worldwide depend on the income that farming
coffee brings in.
Local economists forecast that
Vietnam's coffee prices will increase only slightly this
year because of large stockpiles, but prices are
expected to rise quickly after 2003 due to a sharp
reduction in coffee output and productivity. Export
contracts for Robusta in April and May have earned
traders an average of $400 per ton up $30 to $50 since
late February.
"We are not too optimistic,
although the hard times are over," said Nguyen Trong.
"Prices rises are encouraging, but they depend too much
on the world markets that remain volatile and complex."
(Inter Press Service)
|
| |
|
|
 |
|
