Vietnam’s coffee growers near bankruptcy due to record-low prices
Coffee prices have dropped to record lows in southern Dong Nai province, pushing coffee growers and particularly small enterprises to the verge of bankruptcy.
At the same, large foreign-funded growers, such as Nestle and Neumann Kaffee from Europe, are gaining ground.
Coffee prices have continuously fallen are now hovering around 36,500 dong (US$1.7) per kilogram, the lowest price in years.
This has led to tonnes of coffee from previous harvests being left in farmers’ warehouses.
According to Dong Nai’s Department of Statistics, coffee bean exports fell by 63,000 tonnes in the first seven months of last year to slightly more than 134,000 tonnes. Export revenue of almost US$271 million was down 47 percent year on year.
Nguyen Van Thu director of G.C Food Limited Company in Trang Bom district said his company was processing coffee to export to the U.S.
Currently, the price of unprocessed coffee is at the lowest level while foreign companies continue expanding.
Thu said his company had begun investing in coffee processing with a view to exporting the finished product globally. In the first seven months of this year, it exported 100 tonnes of coffee products to the U.S. market.
It is expected that by the end of the year, the company will export another 200 tonnes.
Recently, the Germany-based Neumann Kaffee group opened a coffee processing factory in Long Thanh district, the second facility of the company in Viet Nam. The group has 46 factories in 28 countries.
The Swiss company Volcafe Vietnam has just opened a processing plant with a capacity of 100,000 tonnes of coffee products a year.