Local coffee prices seen to hit P40/kg this year

Local coffee prices are projected to hit P40 per kilo by the end of the year as prices of coffee in the commodity futures market are rising as a result of a drop in Vietnam‘s coffee production.

An official of the International Coffee Organization Certifying Agency said prices of Robusta coffee have gone up this month to P35 per kilo from P30 in September as the market reacted to Vietnam’s decision to cut down production of the commodity.

Vietnam, the world’s second biggest coffee producer, has curbed its production of Robusta coffee and shifted to planting Arabica which can fetch higher prices. Vietnam reportedly cut down on fertilization and Robusta coffee hectarage to stave off losses from lower Robsuta prices.

This year, Vietnam’s coffee production is seen to drop to 650,000 metric tons (MT) this year from 900,000 MT in the previous year. Next year, production is expected to drop even further 630,000 MT.

Vietnam rose to become the second biggest coffee producer after Brazil in 2001 after a World Bank initiative to boost production in Asia.

As a result, local coffee farmers are anticipating increased income from their output. Previously, the National Coffee Development Board said the appreciating value of coffee in the international market will generate P750 million to P1 billion in income for coffee farmers nationwide.

Aside from the uptrend in world coffee prices, local coffee farmers are also getting a boost from the coffee development program that calls for the intensive fertilization of existing coffee plantations to raise production to initially one ton per hectare.

Current coffee yields range from 400 to 500 kilos per hectare, with farmers having an average holding of two hectares.

The Philippines used to be one of the largest coffee exporters in the world but economic difficulties along with fierce competition from Latin American growers relegated it into being a net importer since the late 1980s.