Vietnam Coffee Growers Hold Out for Better Prices

Vu Trong Khanh

     HANOI - Coffee growers in Vietnam are holding off selling their beans as the end of harvest

approaches, waiting for better prices.

     "Exporters are facing difficulty buying coffee beans from farmers as prices are too low, around

34,500 dong ($1.64) per kilogram," Nguyen Duc Tho, chief executive officer of Duc Nguyen Coffee Co.,

based in Dak Lak province, told The Wall Street Journal. He said farmers are waiting for at least

37,000 dong or 38,000 dong.

     December exports from Vietnam--the world's largest grower of robusta coffee beans, used

primarily in instant-coffee blends--were down sharply, to 100,000 metric tons from 163,000 tons a

year earlier, according to Nguyen Viet Vinh, general secretary of Vicofa, the Vietnam Coffee-Cocoa

Association.

    "Only a small number of farmers are selling moderately to have money for their daily expenses

and for their preparation for the coming Lunar New Year holidays," Mr. Vinh said. At the current

price farmers won't make any profit, he explained, given the rise in input costs in recent years.

     Mr. Vinh said almost all of the coffee for the 2013-14 crop year, which began Oct. 1, has been

harvested; Vicofa's website Monday said harvest is 80% done. He didn't provide an output figure, but

said it is estimated to be down 15% from last year's.

     The association is waiting for a final approval from the government to extend low-interest

loans to coffee exporters to stockpile up to 300,000 metric tons of coffee to support prices.

     "We know that the proposal is now on the table of a deputy prime minister, but there are still

some issues to be considered before it is officially approved," Mr. Vinh said, without elaborating.

     Vicofa Chairman Luong Van Tu said in November that purchases for the stockpiling plan would

take place in the first half of 2014.

     Mr. Tu said exports for the current crop year are expected to total about 1.41 million metric

tons, nearly matching last year's. Coffee exports in the 2012-13 crop year, which ended Sept. 30,

totaled 1.42 million metric tons, according to the Vietnam General Customs Department--down 9% from

the previous year's 1.56 million tons.