Casting a shadow over the Cambodian coffee industry this week was a sudden growth in the sales of Vietnamese coffee as exporters there hope to exploit higher demand and an increase in prices.
According to the Vietnam Coffee and Cocoa Association, the price of coffee in Vietnam’s largest growing provinces has grown by 6 percent in the past month. However, a parallel boost in the Cambodian coffee market has not been experienced.
“The local people are dependent on the Vietnamese market,” said Chan Sarun, minister of agriculture in Cambodia. “[As a result] the coffee in Cambodia is now very cheap and the quality not very good.”
He said that although Cambodian coffee farmers are “passionate” about their trade, there are no decent efforts in place to develop the industry.
Last week, Vietnam, the world’s second largest coffee producer after Brazil, forecast that its exports of the commodity would remain stable trough 2010, reaching between 900,000 and 1 million tons. Traders have been selling the commodity at around $1,450 per ton this week.
Meanwhile, government officials in Cambodia have expressed fears that farmers are facing major burdens in developing a sustainable industry and increasing their exports.
Sreang Cheaheng, deputy director of Ratanakkiri’s provincial agricultural department—Ratanakkiri is Cambodia’s largest coffee-growing province—said that Cambodia only exports between 30 to 40 tons of coffee every year, most of which is sold to Japan at about $1,000 per ton.
“Farmers don’t want to expand because there is just no market for their product,” he said.
In a separate interview last month, he said that limited local demand and poor resources are currently hurting Cambodian farmers.
He cited that the main hurdles Cambodian farmers face are “lack of water, poor irrigation and no electricity,” adding that the high costs involved in producing coffee makes it difficult for farmers to compete with Vietnam.
Yves Chan Tong, secretary of state for the Ministry of Agriculture said, “The main problems are in the coffee market. How we can efficiently export the coffee to foreign markets is our biggest challenge.”
(Additional reporting by Eang Mengleng)