|
|
| |
Vietnam to grab coffee market by the
beans
By Tran Dinh Thanh Lam
HO CHI MINH CITY - Reeling under the triple
whammy of continued low coffee prices, drought-related
crop destruction and allegations that its coffee has
unbalanced the world market, Vietnam is hastily
reorienting its once-highly lucrative coffee industry.
An early incentive has been an encouraging
increase in price, which is now up to VND12 million
(about US$775) per tonne, though still a far cry from
the days when it was $2,000 a tonne.
"The worst
may be over for embattled coffee growers like us," said
Nguyen Vang, the owner of a 36-hectare coffee plantation
in the Central Highlands province of Dak Lak. "For the
first time in many years we may be able to pay off our
debts."
The new mantra is quality instead of
quantity, premium arabica bean instead of
run-of-the-mill robusta.
It is just the recipe
to support the plans of the International Coffee
Organization, outlined at a specially convened meeting
last month. The ICO blamed overproduction and an
increase in poor-quality coffee for driving coffee
prices down to their lowest level in 30 years. The
solution? To remove "between five and eight percent of
the lowest-quality coffee from the export market".
Emphasizing that Vietnam "will learn from Brazil
and other countries that have experienced the same
problems in limiting the volume of low-grade coffee
exports and balancing the plantation of robusta and
arabica", the chairman of the Vietnam Coffee and Cacao
Association (VICOFA), Doan Thien Dao, said the country
"will not export low-grade coffee anymore".
The
"quality" coffee exports that Vietnam is now seeking to
make available do not focus only on the balance between
the harsh-flavored, cheaper robusta and the mellow,
expensive arabica varieties, but also on the production
processes.
Dao said Vietnamese coffee traders
will try to reach the minimum ICO standards for coffee
exports - low moisture content of less than 12.5 percent
and fewer bad beans per sack.
But the new focus
on quality is easier said than done. Drought has
destroyed part of Vietnam's coffee crop and the country
is expected to export less than 500,000 tonnes of coffee
beans at the end of this year's harvest in September,
compared with 761,000 tonnes the previous harvest,
according to VICOFA.
Despite falling prices, the
call from coffee experts in Vietnam to reduce the
cultivation of robusta in Vietnam may run into practical
difficulties. Agronomists and officials are advocating a
shift, on about 120,000 hectares of low-productivity
land, from robusta to cash crops such as pepper and
cashew.
The reality, however, is that this
reversal is being sought against a background where,
since 1980, the amount of land given over to robusta
cultivation has increased an enormous 80 times.
For the farmers, there is more to worry about
than low coffee prices and low quality standards.
"Planting new crops is too adventurous," said Nguyen
Trong, owner of a 20-hectare robusta plantation in Dak
Lak. "We do not even know where to sell them and at what
prices."
That is a problem that has bedeviled
coffee too. Dinh Xuan Quang, former World Bank official
and now advisor to the United States Agency for
International Development (USAID) in Jakarta, said that
in Vietnam, coffee growers only know market prices
indirectly, mainly through their customers.
"That is why when prices go down, they sell at a
loss, and when prices go up, they make little profit. In
the past, growers got 45 percent while processors and
traders collected 55 percent. Now the rates are 10 and
80 percent, respectively."
The reluctance to
switch crops and lack of adequate information explains
why only 10,000 hectares of what were formerly robusta
plantations have, countrywide, been replanted with new
crops.
Nguyen Van Lang, chairman of the Dak Lak
People's Committee, remains confident that "we will
plant coffee only on 15 percent of our land". For a
province that had 7,000 hectares of coffee in 1975 and
now has more than 260,000 hectares, that is an ambitious
target.
Vietnam's coffee industry is often used
as a scapegoat for which to blame the steady decline of
coffee prices worldwide: too much low-quality bean made
available at a time when the big four coffee purchasing
conglomerates - Nestle, Kraft, Procter & Gamble, and
Sara Lee, who together buy nearly half the world's
coffee - have bought robusta to cut their costs and used
new roasting technology more skillfully to create
blends.
But industry experts also consider a
lack of information to be partly responsible for
Vietnamese coffee's low price. "How can a Vietnamese
coffee grower in the highlands know what the price of
coffee may be in three or five years so as to make the
right investment?" asked Quang.
Quang would like
Vietnam's coffee growers to learn from coffee-producing
countries in Africa and South America, where "growers
are linked by satellite to London and know the ups and
downs of international market prices, and thus decide to
sell out or stock their goods".
Agronomist Vo
Tong Xuan, a teacher at the An Giang University, added
that Vietnamese growers could get their market and
commodities information via radio and television. Radio,
an effective solution in provinces such as Dak Lak, is
indeed used - the Voice of Vietnam broadcasts a daily
bulletin of world markets including export coffee
prices.
To pick the coffee industry up by its
bootstraps, Vietnamese growers also argue that they
should follow Brazil, Malaysia and Peru in developing a
strong domestic market to consume the extra volume. "The
domestic market is one of our major targets," said
VICOFA secretary general Dao Thi Mui. "We will develop
domestic demand so as to reduce oversupply.
"At
present, Vietnam consumes around 70,000 tonnes of
coffee, which is not much for a country of 80 million
people," added Mui. "We usually drink more tea than
coffee. Things are changing in the big cities, and this
gives hope to coffee manufacturers."
(Inter
Press Service)
|
| |
|
|
 |
|
| |
|
|
|
| |
|
|
|
|
|
