Measures to develop the coffee industry discussed

A plan to develop the coffee industry over the 2010-2015 period with a vision to 2020 will be approved by the government in the third quarter this year.

This was revealed by the Deputy Minister of Agriculture and Rural Development Bui Ba Bong at a meeting to review coffee production after the 2009-2010 harvest and discuss how to sustainably develop the coffee industry in the future, in Hanoi on May 12.

According to the Ministry’s Plantation Department, the fluctuation of coffee prices in the last thirty years is attributable to unpredictable changes in the acreage of coffee plantations and an unstable supply.

Therefore, the development plan will require that all localities review their coffee plantations and focus investment high-yield farms.

The plan will also encourage localities to increase the acreage under arabica coffee which is of higher value than robusta coffee and invest in high quality varieties of coffee as well as increasing investment in harvesting and processing.

Vietnam has now become the world’s second largest coffee exporter and the largest exporter of robusta coffee. Coffee is now one of the country’s five major agriculture export staples with an export volume of more than one million tonnes and a value of nearly two billion USD per year. In recent years, coffee now comes second after rice in terms of export value.

According to the Ministry of Agriculture and Rural Development, Vietnam now cultivates 521,000 ha of coffee, 93 percent of which is robusta coffee. However, 95 percent of coffee plantations are small-scaled farms managed by farmer households who do not have adequate technology to process and preserve their crops which results in poor quality coffee.

This is the reason for the relatively low export price of Vietnam’s coffee, according to the ministry.

In the first four months of this year, Vietnam exported 465,000 tonnes of coffee, earning 651 million USD, a reduction of 16 percent in volume and nearly 23 percent in value due to the export price falling to 1,390 USD per tonne, 100 USD lower compared to the same period last year.

Falling export prices together with a reduced supply of between 20-30 percent in the 2009-2010 crop compared to the previous crop, pulled back the domestic price to 22 million VND per tonne, half of its peak price in 2008.

To support coffee growers and stabilise the market, the Prime Minister has allowed enterprises to buy 200,000 tonnes of coffee to stockpile and access loans at a preferential interest rate for coffee purchases.

Tags: Vietnam Coffee, Vietnam coffee development