In an opinion piece in The Investor Phan Minh Thong, general director of Phuc Sinh Group, a local coffee exporter, argues that there needs to be greater fairness in Vietnam’s coffee industry. In particular, he suggests agreements with international buyers are often weighted to the advantage of the buyer but also that local businesses in the sector often don’t stick to their contracts anyway.
This article is quite lengthy and repetitive but it does make some interesting points. Specifically, he addresses coffee supply shortages emanating from Vietnam last year as attributed to:
- Coffee farmers selling small parcels of their land each year and that it all adds up to a significant reduction in coffee growing land;
- There were fewer workers in agriculture after COVID which led to higher labour costs; and
- Changing weather patterns and conditions.
Thong goes on to say that crops were sold in advance at agreed upon prices, however, as coffee prices went higher and higher farmers refused to fulfil these agreements in search of high prices. This threw the market into chaos, and unable to meet their export obligations, a number of export firms–the middle persons–went bankrupt.
Thong concludes that for the sustainable development of the industry coffee buyers need to be less ‘greedy’ and need to work closer with exporters and farmers.
See also: How to Export Coffee from Vietnam: Ultimate Guide 2024