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Vietnam coffee prices up on global demand
When you think of major coffee countries, odds are that Vietnam does not jump to your mind. Yet in recent years, Vietnam has shot up through the world's coffee exporting ranks, now second only to Brazil in tons of coffee exported nationally. This rapid rise from utter anonymity in the coffee-producing world to its current exporting prowess has put the country at the center of a global economic controversy, as countries from Colombia to Tanzania blame Vietnam for contributing to the swell of coffee supply and plummeting prices. No small fact, considering that coffee is the world's second-most widely traded commodity, second only to petroleum.
Nearly all coffee grown in Vietnam is of the Robusta variety, one of the two principal species of coffee grown in the world, the other being Arabica.
While by no means the only source of the global market flood, Vietnam has played a major role in the increase of global coffee supply, and the markets have taken notice. Prices of robusta coffee have plummeted in the 21st century - trading at U.S. $.054 per pound on the New York market in January 2000, robusta's value had fallen nearly in half by March 2001, down to U.S. $.031 per pound, according to CoffeeResearch.org. By May 2001, the International Coffee Association held a conference dedicated in part to addressing "the critical situation of the present world coffee market."
Vietnam is likely to gain coffee export turnovers of 950 million U.S. dollars this year, up from 725 million dollars last year, mostly due to higher world prices.
The average export price of Vietnamese coffee in the 10-month period stood at 1,175 dollars per ton, while that in early 2006- 2007 coffee crop was below 1,000 dollars. Specifically, the average export price was 832.9 dollars per ton in November 2005 and nearly 909.1 dollars in December 2005, said the center.
Vietnam, the world's second biggest coffee exporter, is expected to harvest 810,000-870,000 tons of coffee in the 2006- 2007 crop, starting last November, up from 690,000 tons in the previous one, according to the Vietnam Coffee and Cocoa Association.
Local farmers and enterprises should join hands to grow and process coffee on larger scale by employing more advanced equipment and technologies, the association said, noting that many coffee exporters in Vietnam are weak in terms of finance, trade expertise, and information analysis capability.
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