Agricultural Commodities Export in Central Highlands: Puzzled In Seeking Output Market

Tea and coffee are two of major exporting commodities of Central Highlands' agriculture, contributing to enhance living standards for thousands of farmers in the region. However, export markets for these two commdities have yet to be stable, usually fluctuating due to shortfall in strategic development.

In the circumstance that region's agricultural products mostly rely on some familiar market, several enterprises are currently looking for brand new ones. Yet reaching for sustainable output has still been a conundrum. 

Vietnam Tea's Instock

According to insufficient statistics accumulated to October 2015, the inventory amount of tea products of Lam Dong's enterprises is roughly 5,000 tonnes. Over a month after provincial authority held an output conference for this industry, current status of intaking has not yet to turn positive. At Phu Toan Tea Co., Ltd (commune 11, Damb'ri village, Bao Loc city), deserted view covers rows of plants. Said Mr. Teng Chao Chuan, company's General Director, Secretary-General Taiwan Tea Trading Association in Vietnam: "At present, the company has to make redundant of half in 100 labors since having not found output for manufactured products. We must unpredictably adjorn 99% of purchasing because firm's inventory is more than 50 tonnes already."

Tea collectors are working on farm in Bao Loc, Lam Dong

Since enterprises stopped purchasing, tea farmers have to bring qualified Oolong tea knocking traders' doors. Reported Mr. Ninh Anh Cuong (commune 12, Damb'ri village): since tea manufactures' decisions, his family had to mingle around to unexpectedly offer the much lower price of 20,000 dong/kg of fresh tea (not long ago 25,000 - 27,000 dong/kg). Following Taiwan Tea Trading Association in Vietnam's assessment, 16 years from establishment, this is the toughest period since they invested to Vietnam's tea.

After getting paper of suggesting to collaboratively seek output for tea products from Lam Dong People Committee, 11th November, Vietnam Tea Association imformed: "At first, market on Lunar New Year 2016 will badly need Oolong Tea products for gifting. For long term, tea manufacturers should aggressively execute marketing campaigns and approach domestic market to find way to cut down product price as much as consumers could accept."

On 12/31/2015, Vietnam are officially joining ASEAN Economics Community (AEC), then Vietnam's commodities are managed to freely flow from one market to another member's, tea products (including Oolong tea, Green tea and Black tea) can easily enter a potential market with 600 million of population. Supposed Mr. Doan Trong Phuong: "Putting all eggs into one basket whilst too much osciliation will potentially lead to diverse hazards. The precious lesson learnt from Taiwan counterpart will be remarkably useful for tea manufacturing industry, as we could not foresee the complicated happening from that market."

Said Mr Phuong, beside core playing grounds like Russia, Taiwan and Midlle East, recently we inevitably need to expand to others worldwide. We forcefully have to meet required quality standards to be able to export to those markets."Being accumulated from beginning of the year, over 10 tonnes of fresh tea manufactured at Vina Suzuki Tea Co., Ltd, located in Di Linh district (Lam Dong province) following organic producing process exported to Germany, this is positive signal illustrating that Vietnam tea has initially approach EU's market."

Coffee's difficulties

Meanwhile, coffee exporters in Central Highlands has also been in tough time in purchasing raw material as farmers has not yet released their sources.

Coffee collectors are classifying raw material

Stepping into harvest season 2015 - 2016, coffee price in the region has dropped down to 34,000 dong/kg, around 8,000 dong/kg lower compared to the the highest set in 2014 - 2015 season. Dozens of farm owners have festively found collectors and depleted the inventories at the same time. Said Ms. Tran Thi Thuy (Ea Dinh commune, Cu M'gar Dist., Daklak province): "From year start, my family have got 7 tonnes of raw coffee yet we have to instock 5 tonnes more at 39,000 dong/kg. We scheduled to hold to sell at 45,000 dong/kg, still we would get to wait more as the price is this low." Having to capital for next season investment, a great deal of growers in Duc Manh village (Dak Mil Dist., Dak Nong province) unfortunately have to release partially the inventory at much lower price to be capable of hiring workers and buying fertilizer.

At beginning of this year, a variety of SMEs in Central Highlands also purchased coffee then hold for increasing price to trade and got deficit. Informed Ms Nguyen Thi Thanh Thuy, Vice Director of Tan Phat Phu Co., Ltd (Tra Da village, Pleiku city, Gia Lai province): "In the last coffee harvest season, our firm purchased over 400 tonnes of raw coffee at 41,000 dong/kg. After that, we selled more than 200 tonnes for debt to major trading corporations and got only 70% of the spot price. End of 3-month deadline, coffee price drastically decreased, those traders adjusted down to 34,000 dong/kg themselves. Obviously, we got a massive deficit."

As a matter of fact, Central Highlands' people instock coffee in bulk dramatically influenced the region's exporting volume while purchasers can not get enough storage. According to Mr. Do Van Hung, Head of Imexport-Market Dept. of 2/9 Imexport Co., Ltd (Dak Lak), this season, a variety of coffee imexport companies have been in a tough time to purchase raw coffee for exporting.

Following Dak Lak's People Committee's report, in 2014 - 2015 season, the province has been exporting 177,097 tonnes of raw coffee, 51,271 tonnes (22.4%) decrease compared to the previous season. At the meantime, exporting volume reached $364,139 million, $140,296 million (27.8%). In Gia Lai, accumulated to July this year, coffee exporting volume gained just 65,000 tonnes, 64% reduction in quantity and up to 66% in value as year-on-year basis.

Khoa Le