Coffee prices increase, farmers are happy, businesses are worried

Đình Quang |

Lam Dong - This year's coffee season, prices are high, farmers are excited, processing enterprises are worried about the lack of raw materials for production.

Farmers hold coffee waiting for price increase

The continuous increase in coffee prices in recent days is bringing a picture of two contrasting colors between farmers and businesses.

While Lam Dong farmers are enjoying the sweet fruits of selling coffee at record prices, processing enterprises are facing an unprecedented crisis. Enterprises reflect that they are facing a serious shortage of raw materials.

With prices at an all-time high, many farmers have decided to hoard coffee instead of selling their produce immediately. For example, Mr. Hoang Van Dat’s family in Lam Ha district (Lam Dong) is cultivating 10 hectares of coffee, harvesting about 20 tons of beans this season.

Nguoi dan Lam Dong vui mung vi gia ca phe nam nay tang cao. Anh: Dinh Quang
Lam Dong people are happy because coffee prices have increased this year. Photo: Dinh Quang

Despite the high price of coffee, Mr. Dat only sold 2 tons to pay off his debt for fertilizer, pesticides and labor. The rest was processed by Mr. Dat and stored in a warehouse until the price peaked.

“At the beginning of the 2023 crop, I sold all the coffee for more than 70,000 VND/kg. However, after that, the price increased continuously, causing my family to regret hundreds of millions of VND. Learning from experience, this year I decided to store all the remaining coffee, waiting for the coffee price to exceed 130,000 VND/kg and then consider whether to sell it or not,” Mr. Dat shared.

Similarly, Mr. Nguyen Van Huy, in Di Linh district, Lam Dong also retained most of his coffee output.

“After Tet, we need a large amount of money to take care of the plants, water them at the end of the dry season and fertilize them at the beginning of the rainy season. The stored coffee will be sold, helping the family to proactively raise capital for this period,” said Mr. Huy.

Nhieu doanh
Many businesses in Lam Dong lack coffee raw materials for production. Photo: Dinh Quang

Businesses lack raw materials for processing

In contrast to the initiative of farmers, coffee processing enterprises are facing many difficulties when the supply of raw materials is limited.

Mr. Tran Mai Binh, Director of Hoa Linh Coffee Cooperative (Di Linh District) said that the unit needs 150 - 160 tons of fresh coffee each year for production. However, up to now, due to farmers' hoarding, the cooperative has not been able to purchase any kilos of coffee.

“In previous years, at this time, we received dozens of tons of fresh coffee. However, this year the supply has completely stagnated. Production and business are like a gamble,” Mr. Binh shared.

A similar situation occurred at Nguyen Phuc Nong Company Limited (Bao Lam District). This unit specializes in processing organic Robusta coffee, with a purchase price twice as high as the market price (VND 35,000 - 40,000/kg of fresh coffee).

“Although we have signed contracts with farmers, some households still do not sell. Therefore, we are forced to find other sources of raw materials to compensate for the output. Currently, the price of input materials is high, but when negotiating to increase the product price, the partners have not yet agreed,” said Ms. Nguyen Thi Tho, representative of the company.

Farmers waiting for good prices to sell is an inevitable trend in the current context of fluctuating coffee prices.

However, this situation is putting great pressure on businesses that depend on stable supply to maintain production and fulfill export contracts.

Đình Quang
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