Domestic coffee sector faces foreign pressure in Dong Nai

A farmer is harvesting coffee fruits. (Source: VNA)

Concerns are growing in southern Dong Nai province as coffee prices are hitting a record low and local coffee producers, particularly small enterprises, are on the verge of bankruptcy while their foreign-funded peers are gaining ground.

Coffee prices have continuously reduced and are now hovering around 36,500 VND (1.7 USD) per kilogram, the lowest value in years. Hence, up to 60 percent of the coffee from previous harvests is still occupying the warehouses of local farmers.

According to Dong Nai’s Department of Statistics, coffee bean export reduced by 63,000 tonnes from last year to slightly more than 134,000 tonnes in the first seven months of 2015. The product’s export revenue was no better off, valuing almost 271 million USD, down 47 percent year on year.

Meanwhile, foreign companies are expanding their foothold. Recently, the Germany-based Neumann Kaffee Gruppe inaugurated a coffee processing factory in Long Thanh district, the second facility of the company in Vietnam. Neumann Gruppe boasts 46 factories in 28 countries that process ten percent of the overall global coffee export volume.

The 100-percent-Swiss-capital Volcafe Vietnam has just put its plant into operation with an annual capacity of 100,000 tonnes of coffee products each year.

Netslé also opened an 80-million-USD plant producing caffeine-free coffee in the province in March.

Vietnam is the second biggest coffee exporter worldwide behind Brazil.-VNA