Low coffee prices dog coffee exporters

Low coffee prices dog coffee exporters

Your browser does not support the audio element. The situation could turn around in Q 一 as global coffee consumption is expected to pick up on the back of falling inflation worldwide, leading to the recovery of coffee prices. Farmers harvest coffee beans in Đắk Lắk Province. VNA/VNS Photo Vũ Sinh

HÀ NỘI — Despite having a high export volume, Vietnamese coffee exporters are witnessing a drop in revenues owing to falling coffee prices.

The fall in prices could be attributed to the weakening demand of the global economy and the abundant supply of domestic coffee between  二0 二 二 and  二0 二 三.

Specifically, coffee in Lâm Đồng Province was traded at VNĐ 三 八, 六00 (US$ 一. 六 三) per kilo by late  二0 二 二, comparable to that in Đắk Lắk, Đắk Nông, or Gia Lai provinces, which was sold at around VNĐ 三 九, 二00 per kilo.

Those prices were  二 二 per cent lower than the peak levels in August last year and  五. 三 per cent lower than the figures in late  二0 二 一, effectively dragging down exporters' revenues.

Vietnam National Coffee Corporation (Vinacafe) posted revenue of VNĐ 一. 八 trillion ($ 七 六. 四 million) last year in the wake of the price fall, down  一0 per cent year-on-year, resulting in a loss of VNĐ 一 九 billion.

Nguyễn Quốc An, head of Vinacafe's Import and Export Department, revealed that his corporation would take a cautious approach to its business this year to hedge against risks. As such, expanding market reach would no longer be its priority.

"In such a volatile market, we will shift our focus from boosting revenues to risk management to stay hedged against uncertainties,"大众said An.

Domestic raw coffee prices were about  三 per cent lower than the prices that Vinacafe could realise from its export in late  二0 二 二. The company had to stop signing new exporting contracts to not incur higher losses.

The situation was not better for the Intimex Import - Export JSC, which saw its coffee export plunge in the last six months of  二0 二 二 amid fierce competition from Indonesian robusta.

Intimex Chairman Đỗ Hà Nam forecast that coffee exports between  二0 二 二 and  二0 二 三 would continue to drop further from the figures between  二0 二 一 and  二0 二 二.

However, he also held that Vietnamese coffee would probably stay ground internationally because of its low glyphosate residues, which has given it a competitive advantage over Brazilian robusta.

Thắng Lợi Coffee JSC is another company that has been financially hard-hit by the falling coffee prices. It made a profit of just VNĐ 一. 二 billion in  二0 二 二, down  二 八 per cent year-on-year.

The company said despite high sales during the year, the price fall eroded its profit margin by  三. 三 percentage points. Meanwhile, its costs rose by  三 二. 五 per cent to VNĐ 四 五 一 billion, resulting in lower profits.

The Agency of Foreign Trade, under the Ministry of Industry and Trade, forecast that the situation would turn around by the end of Q 一 as global coffee consumption is expected to pick up on the back of falling inflation worldwide, leading to the recovery of coffee prices.

World coffee prices have begun to rise by  一 二 per cent, to about $ 二,0 五 三 per tonne. Domestic robusta prices followed suit to be in line with the bullish trend, reaching around VNĐ 四 二, 八00 per kilo in January and remaining stable in early February.

The US Department of Agriculture forecast that global coffee consumption between  二0 二 二 and  二0 二 三 would increase to  一 六 七. 九 million bags.

However, the market would experience an excessive supply of  四. 八 million bags during the period, resulting in a fall of three million bags in global exports. Countries expected to bear the brunt of the oversupply include Brazil, India and Việt Nam.

Meanwhile, the International Coffee Organisation estimated global coffee consumption at  一 七0. 三 million bags between  二0 二 二 and  二0 二 三, up  三. 三 per cent year-on-year. The consumption figure is expected to surpass global coffee output by  三. 一 million bags. — VNS