That was the message raised by Mr. Nguyen Nam Hai, Chairman of the Vietnam Coffee and Cocoa Association (VICOFA), at the expanded VICOFA executive committee conference in Ho Chi Minh City on April 11.
At the conference, a number of foreign invested (FDI) enterprises such as: Neumann, JDE,… stated the situation of supply chain disruption, some partners delayed delivery and even did not execute contracts. This will affect the reputation of the Vietnamese coffee industry and in the future Vietnamese coffee may be replaced by cheaper sources such as Brazilian and Indonesian coffee.
Mr. Nguyen Dang Mien, representative of Nestlé Vietnam Company, said that Vietnamese coffee is very important to Nestlé. The company has built a sustainable coffee program in Vietnam since 2011. But in the past 2 years, due to a breakdown in the raw material supply chain, Nestlé had no other choice but to import raw materials from other countries to stabilize. manufacture.
Mr. Do Ha Nam, Vice President of VICOFA, said that as coffee prices doubled in just half a year, many suppliers had to sell their houses to buy high-priced goods to carry out low-priced contracts in order to maintain their credibility. “Of course, there are also those who take advantage of the situation for personal gain, who are the worms that spoil the soup. I know that there are trade disputes that have been sent to court, awaiting trial” – Mr. Do Ha Nam information.
The VICOFA conference attracted a large number of businesses to participate
At the conference, VICOFA representatives also stated that the root cause of the increase in coffee prices in the past 2 years is because Vietnamese farmers have experienced 20 years of cheap coffee so they have changed crops, causing output to decline.
Mr. Le Duc Huy, 2/9 Dak Lak Import-Export Company Limited (Simexco Daklak), said that the coffee industry has just gone through a “cataclysm” but the majority of Vietnamese export businesses have been very brave. When implementing contracts, the contract failure rate is low, mainly for small sources of supply.
“There is a truth that needs to be recognized that in the 2023-2024 coffee crop, FDI enterprises bought coffee too early, starting from June 2023 (when coffee prices were still low – PV) while other enterprises bought coffee too early. Vietnamese coffee exporters buy in after harvest, starting from November 2023. The large price difference between the two times has caused many risks and this is a big lesson for the next crop.” – Mr. Huy said.
Speaking at the closing of the conference, Mr. Nguyen Nam Hai, Chairman of VICOFA, noted that farmers, agents, and export businesses should minimize buying and selling far to avoid risks. For sales contract disputes that have occurred, it is recommended that buyers and sellers negotiate and agree to share risks, share prices as well as progress and delivery time when necessary. Coffee prices suddenly increase, avoiding cumulative damage to one side.
VICOFA Chairman also recommended that the bank should increase loan limits and prioritize interest rates for coffee import-export businesses when coffee prices double to have enough capital to purchase coffee.
