Bitter brew for coffee traders

December 22, 2011 | 16:34

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Coffee traders are facing difficulties sourcing products on the back of farmers’ hoarding.

Thang Loi Coffee Company general director Nguyen Xuan Thai said: “Coffee farmers have stored their products in the hope of better prices in the coming months, putting pressures on coffee exporters.”

Coffee now fetches VND37,000 per kilogramme against VND40,000 per kilogramme a month ago.

“Coffee beans in Dak Lak now cost VND40,000 per kilogramme, a bit higher than the world prices,” Thai added.

A branch director of a foreign-invested coffee firm in Central Highlands’ Lam Dong province said coffee growers refused to sell products saying the current price was low. “If the situation continues, coffee enterprises will have difficulty in gathering sufficient coffee to export.”

Cafecontrol’s general director Nguyen Nam Hai, however, said farmers storing coffee was a good signal. “In previous coffee crops, farmers were eager to sell products when coffee was still green, leading to continual drops in coffee prices,” said Hai.

Hai forecasted coffee prices this year would remain high and stable on the back of limited supply scarce supply since farmers kept products in store.

Hai said hoarding coffee was not risky to farmers, since supply was less than the demand.

Reality shows that farmers have harvested about 40 per cent of their crop. If farmers continue to hoard coffee there will be a fierce competition in product procurement between domestic and foreign-invested enterprises.

“If this happens, the coffee prices will increase and coffee farmers will benefit,” said Hai.