Lao coffee sales go off the boil as price drops
Lao coffee sales go off the boil as price drops
Lao coffee growers and businesses are concerned about the impact on their business of the low coffee price in the world market.
It has caused some coffee traders in Champassak province to store their coffee crop for export until the price rises, Lao Coffee Association Office Head, Mr Sivixay Xayaseng, told Vientiane Times last week.
However, a number of business operators believe the price will improve in July and August, he said.
The coffee price for export at the beginning of this year was about US$4,100 (33 million kip) a tonne but it has now dropped to about US$3,000 (24 million kip), while the price of green beans has dropped from 28,000 kip to 19,000 kip a kg, Mr Sivilay said.
This price is a reduction on the March figure and he expected it would drop further in June because of the increased supply of coffee on the world market.
The issue has caused some small coffee operators to sell their farms after making losses for several months, he said.
However, growers who planted the crop many years ago are still operating.
Foreign investors, especially those from Vietnam and Singapore, are seeking assistance from the government after making losses, Mr Sivilay said.
“These companies have not only been affected by the low pricing but also by unfavourable weather conditions, especially fog,” he added.
In times of very low prices, the government should cancel the export tax as well as provide funds to support companies.
The association has advised the government about the situation with a request for assistance but there has been no response so far, said Mr Sivilay.
The association is currently looking for other ways to promote Lao coffee products to international markets.
Last year's Lao Coffee Festival in Champassak province and participation in the Thaifex-World of Food Asia, Thailand, helped to make Lao coffee better known in the region and the world.
Laos was affected by a coffee price cris is once before, in 2002-2003, when the price of coffee for export dropped to US$700-US$800 a tonne.
Coffee is one of Laos' top export earners and last year it exported more than 30,000 tonnes of coffee products worth over US$70 million.
Farmers are currently growing about 70,000 hectares of coffee and the government hopes this will expand to 100,000 hectares by 2025, Mr Chansamone said.
The crop is mostly grown on the Bolaven plateau in Champassak province and in Saravan, Attapeu and Xekong provinces.
