Coffee prices predicted to keep rising under impact of world prices

The Vietnam Coffee Cocoa Association (VICOFA) predicted that prices of coffee in the country will keep increasing because coffee prices in the world have constantly fluctuated.

VICOFA predicts coffee prices will keep rising under impact of world prices

However, VICOFA said that it is difficult to say how much the specific increase will be.

SGGP newspaper on April 2 published an article that increased raw coffee prices delight farmers, yet cause unease among businesses. On April 6, SGGP Newspaper reported that coffee prices in the Central Highlands region had exceeded VND100,000 a kg and coffee prices in many places kept increasing by VND3,000 a kg on April 7.

The Vietnam Coffee and Cocoa Association (VICOFA) said that the general trend is that domestic coffee prices are still increasing due to the direct impact of constantly fluctuating world coffee prices; yet, the association can’t forecast the specific increase level.

According to the Ministry of Agriculture and Rural Development, Vietnam is the second largest supplier of coffee output in the world after Brazil. According to estimates, prolonged drought and heat will reduce output by about 20 percent in the Southeast and Central Highlands regions.

Purchasers and processing coffee exporters said that if the prices of raw coffee continue to increase and are as difficult to forecast as they are currently, it will continue to affect production and business activities. As a consequence, many businesses dare not to sign stable export contracts with partners but only spot contracts - buying or selling coffee for immediate settlement (payment and delivery) on the spot date.

Economic experts also warn that rising coffee prices will be very beneficial for farmers.

However, increasing prices will show signs of virtual increases resulting in some instability in the domestic market because establishments holding large amounts of coffee stop selling or they are hoarding goods to wait for new prices, which can lead to a frozen market or slow transactions.

The Ministry of Agriculture and Rural Development further informed that this year's coffee crop will not be harvested until around October. To ensure stable productivity and the output of raw material, the Department of Crop Production under the Ministry of Agriculture and Rural Development has sent a document to localities requesting to assess the current production - consumption situation as well as the weather to continue to monitor developments and provide forecasts so that responsible agencies can give early guidance.

According to Director Nguyen Nhu Cuong of the Department of Crop Production’s preliminary assessment, this year's productivity and output of the coffee crop in the country only reduced due to drought. In the immediate future, the Department of Crop Production continues to ask localities to guide people in implementing preventative measures to cope with drought early and work to have enough water for irrigation.

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