5 Major Food Firms in Vietnam to Start Stockpiling Coffee Mid March
Five biggest coffee companies in Vietnam will receive soft loans of interest rate of 6% per year to start stockpiling 200,000 tons of coffee from Mar 15 to Sept 15.
The companies will have to buy coffee from local farmers at least prices of VND23,000/kg of 2nd graded-Robusta.
Since the beginning of this year, coffee prices have been dropping due to high supply on weak demand. On Mar 11, the coffee beans was traded at VND22,800/kg on the domestic market while export prices were at $1,163/ton, FOB-HCM port.
To reduce supply and prevent a slump of coffee prices, the Vietnam Coffee and Cocoa Association (Vicofa) requested local companies to stockpile the beans await higher prices.
Do Ha Nam, head of a club of 20 leading coffee exporting companies in Vietnam said that the stockpiling will affect both producers, sellers and buyers, stressing that the companies will change their export plan.
“Vietnamese exporters will reduce sale and it will affect the world market in the coming months,” Nam said, adding that other biggest coffee producers in the world like Brazil and Indonesia have also cut supply to raise prices.
Nam also predicted that coffee export will drop to $1 billion in 2010 from $1.7 billion in 2009.
Vietnamese companies exported 200,000 tons of coffee out of 500,000 tons under already-signed contracts in the first two months of this year. They will stockpile 200,000 tons out of 500,000 tons being held by local farmers. (Vietnam Agriculture)
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