Exporters likely to miss profit-taking chance from price increase

Despite of the surging global price caused by the world food shortage, many local agricultural product exporters look set to miss gilt-edged opportunities to beef up their sales at foreign markets due to a lack of capitals.

Luong Van Tu, chairman of the Vietnam Coffee – Cashew Association, said “although the surging global price was predicted, local coffee exporters still failed to buy materials with huge volumes due to a shortage of capitals.”

“Foreign-owned companies with strong financial base, on the other hands, have reserved a lot. Thus, the more the price increases, the more profits they take.”

Local coffee exporters require loans in long terms ranging from six to nine months in order to buy 200,000-300,000 tons of raw coffee for reserve in the beginning of the harvest season every year, Tu says.

“Despite Vietnam the coffee exporting country, domestic exporters with weak financial base cannot compete with foreign-owned competitors. They struggle to take initiative in price negotiations with foreign partners and stockpiling materials,” said Nguyen Duc Thanh, vice chairman of the Vietnam Cashew Association.

Do Ha Nam, chairman of the Vietnam Pepper Association, warned farmers should not sell their crops too early as the global pepper price will increase steeply soon this year.

The domestic pepper price surged to a record high of VND90,000 (US$4.5) per kilogram, tripling last year’s figure, Nam said. The price of exported pepper weighted 500 gram per liter amounts $4,300-4,400 per ton, a year-on-year increase of $1,000-1,400 per ton, he added.

“The pepper export turnover in 2011 is expected to reach around $500 million,” he said.

Coffee price in highland provinces is also on a rise, reaching to VND46,000-47,000 ($2.3) per kilogram. Experts expected the global coffee price would increase sharply as the world’s largest exporting countries suffered bad crops due to natural disasters.

“We achieved a bumper [rice] crop this year. Traders came directly to paddy fields to buy for VND5,900-6,000 per kilogram of common rice and VND6,100 per kilogram of long-grain rice,” Nguyen Van Lam, farmer of the Mekong Delta province of Dong Thap, said.

The prices saw farmers earn a net profit rate of VND22-25 million per hectares, Lam said.

Farmers have harvested 6,200 hectares of the winter-spring crop so far this year, making 50 percent out of the total harvesting area, said Nguyen Trang Su, vice chairman of the Hong Ngu District People’s Committee in Dong Thap Province.

“The yield reached to a bumper result of 7.5 tons per hectare. We asked farmers to finish the harvest as soon as possible to quickly replant another crop for the summer-autumn season,” Su said.

Dr. Duong Nghia Quoc, director of the Dong Thap Province Department of Agriculture and Rural Development, said around 80,000 out of 206,000 hectares of paddy fields in the province were harvested, with a bumper yield of 7 tons per hectare.

Dealers are buying rice strongly, helping farmers to enjoy a rate of return of 40-50 percent, Quoc says.

(Source: http://www.saigon-gpdaily.com.vn/Business/Economy/2011/3/90462/)