July 01, 2017

Coffee growers counting beans, out of pocket for product

By:  Vientiane Times, June 27, 2017

Dao-Heuang Group will seek to repay the money it owes the country’s coffee farmers as soon as possible after the company fell several months behind in payments for the raw beans.

The company now owes farmers a total of 27 billion kip after it paid off significant debts according to the Champassak provincial Industry and Commerce Department.

Representatives of the company made a commitment to pay back the money owed farmers at a meeting in the province.

The meeting came after the department invited the company’s representatives to a discussion with growers last week to identify solutions to the problem, the department office head, Mr Sourat Phadoungsiyavong told Vientiane Times yesterday.

The measures were announced after Ministry of Industry and Commerce received a letter of petition from the coffee growers representative in Champassak province.

The ministry then announced that the provincial Industry and Commerce Department would join with the relevant sector to help solve the issue.

The remaining 27 billion kip is owed to almost 2,000 farming families, he said.

Dao-Heuang Group is the largest coffee buyer in Laos, leaving many coffee growers with few alternatives to sell their product as demand from other companies remains limited. The company has confirmed that it will pay all money to farmers but not the timescale.

Coffee remains a key commercial export crop in Laos, and the nation’s product continues to be popular among people from home and abroad while increasingly well-accepted in the international market. The challenges for the industry carry on as the world price for coffee has dropped significantly over the past few months.

According to the Lao Coffee Association, robusta beans are down from US$2,100 in March to US$2,014 this month.

Falls have been even more spectacular for the higher grade Arabica, which was selling at US$ 3,100 in March before falling to US$2,500 a tonne this month.

The value of coffee exports through the Lao Coffee Association has reached 21,000 tonnes worth more than US$50 million.  This figure is expected to increase in terms of volume and value for the current year.

Investors from several countries are investing in coffee farms across the country including those from Vietnam, Thailand, the Republic of Korea, Chinese Taiwan, Singapore and India.

Most Lao coffee is grown in southern provinces.  It is exported to Chinese Taiwan, Italy, Japan, Spain, Poland, Germany, the US, France, Belgium, Sweden, Thailand and Vietnam.

In 2013 Laos exported 30,000 tonnes of coffee valued at US$72 million.  The figure dropped to 26,000 tonnes valued at US$60 million in 2014.

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