Vietnam lost half a billion dollar because it picked unripe coffee beans

Despite being a big coffee exporter in the world, Vietnam’s coffee is unable to obtain high prices. Experts have pointed out that this is because of the Vietnamese farmers have the habit of harvesting ripe and unripe coffee beans at the same time.

The coffee prices have been increasing significantly these days in the central highlands, the heart of Vietnam’s coffee production. The domestic price has climbed to 35,000 dong per kilo, the highest level in the past two years. Meanwhile, the robusta export price has also increased to $1945 per ton FOB.

However, even these increases do not make Vietnamese exporters and farmers happy, because Vietnam’s coffee is not considered as high quality in the world, which explains why the prices of Vietnam’s coffee are always lower than the prices of Indian, Brazilian and Columbian products.

It is puzzling why Vietnamese exporters and farmers have been agreeing to sell at the low export prices for such a long time, and have not done anything to change the situation.

Experts have pointed out that Vietnamese farmers have the habit of picking ripe and unripe beans at the same time. Ripe coffee beans regularly account for 80 percent, while sometimes the percentage of unripe coffee beans may reach 30 percent.

According to the Ministry of Agriculture and Rural Development, the habit of picking unripe beans leads to the loss of 30 percent of coffee bean output every year, of 300,000 tons, worth $540 million (the average export price is $1800 per ton). If farmers pick 1100 unripe beans, they will be able to process one kilogramme of coffee, while if they pick ripe beans, the amount will allow to make 1.45 kilogrammes of coffee.

A question has been raised of why Vietnamese farmers continue to pick unripe coffee beans? The truth is that it is not that they want to pick unripe coffee beans but that they have no other choice. The habit is in fact imposed by the current way of collecting coffee beans applied by intermediate merchants (who collect coffee beans from farmers to sell to processing factories or export companies)

According to Nguyen Van Sinh, Deputy Director of Dak Lak Agriculture and Rural Development, merchants prefer a mixture of ripe and unripe coffee beans which is cheaper to, paying more for ripe coffee beans and paying lower for unripe coffee beans. Therefore, farmers would rather pick both unripe and ripe coffee beans at the same time, which requires lower labour costs, than selecting ripe beans,.

“The labour cost now is very high. With ripe coffee beans, farmers would be able to pick up 50 kilos a day, while thw unripe coffee beans, they would be able to pick up 200 kilos,” he said.

Why do Vietnamese enterprises only want to purchase mixed unripe and ripe coffee beans? The answer is that the current 150 coffee trading companies now cannot be picky about collecting coffee beans from farmers, because they rely on foreign partners. Foreign importers would accept high quality coffee products from India, Brazil and Columbia, but they would only buy coffee from Vietnam at low prices.

Director of a Vietnamese enterprise said that previously, Vietnamese enterprises competed fiercely with each other by lowering the export prices. Therefore, foreign partners tried to force the prices down.

“They purchase Vietnam’s coffee at low prices, then mix with the coffee from other countries to process,” he said.

Nevertheless, Vietnamese exporters think that Vietnam will be able to improve the current situation. If Vietnamese enterprises can improve the quality of coffee products, they will be able to control the prices in the world market as it is holding 40 percent of the robusta market.- Saigon tiep thi

Tags: Vietnam coffee beans