Enterprises protest conditions to export coffee

A large number of enterprises insist that the regulation on conditions to export coffee is merely an administrative measure and that it doesn’t help solve the industry’s problems.
This view was shared by many traders at the conference to review the 2010-2011 crop and suggest guidelines for the next crop held by the Vietnam Coffee and Cocoa Association (Vicofa) last Saturday in HCM City.

The official dispatch 290/BNN-CB of the agriculture ministry had set conditions for enterprises to export coffee; one of which is that firms have to have exported coffee in two consecutive years with at least 5,000 tonnes per year. These conditions are likely to be included in a resolution on coffee exporting to be released soon.

Many coffee firms participating in the conference suggested these requirements should be applied to export companies only. As for enterprises that produce, process and export coffee on their own, there should be different conditions.

Pham Tuong Tan, chair of the farm produce company Tan Lam in Quang Tri Province, said the conditions in dispatch 290 will prevent his company from exporting. Tan Lam Company, with 500 hectares of Arabica coffee, currently exports only 1,000 tonnes a year.

Pham Gia Pho, chief representative of the Dak Lak-based Eapor Coffee Company in HCM City, said these conditions are stonewalling small firms who survive in the market thanks to their high business efficiency.

Eapor’s products are always sold at higher prices than the market by some $200-300 a tonne, but its production fails to meet the condition of 5,000 tonnes a year, Pho said.

The company harvests 3,000-4,000 tonnes of coffee annually and processes 1,000 tonnes with wet coffee technology.

Pho is highly concerned that Vicofa’s conditions will create a market monopoly for large firms.

Regarding the condition that coffee exporters must have storage facilities, a representative of Hanoi Trade Corporation (Hapro) said coffee companies can easily satisfy that by signing contracts with other firms with a storage system already in place.

A Vicofa representative said the association would gather its members’ opinions and submit them to the Ministry of Agriculture and Rural Development and the Ministry of Industry and Trade for these agencies to refer to and issue suitable regulations to ensure fairness and sustainable development of the coffee industry.

According to Vicofa, 1.28 million tonnes of coffee was exported during the 2010-2011 crop, a rise of 7 percent against last year’s crop. The total export revenue was $2.7 billion, up 56 percent in value.

Vicofa on the same day signed an agreement with Vietnam Bank for Agriculture and Rural Development (Agribank) on credit support worth VND5 trillion for coffee makers in the next crop.

Saigon Times Daily

Tags: Vietnam Coffee, vietnam coffee exports, Vietnam coffee exports 2011