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Laos’ Revenues From Coffee Rise Despite Reduction In Plantations

Source: Vientiane Times

The number of coffee plantations under the Lao Coffee Association (LCA) has decreased by around 5 percent to 10 percent in the first five months of this year as growers shifted to cassava for better incomes.

With the price of Lao coffee falling and facing challenges posed by coffee larva, and types of Zeuzera Coffeae and Acarolepta Cervina in recent years, some farmers have shifted from coffee to grow other commercial crops, according to studies done by the association.

However, the value of coffee exported by Laos increased as the price of local coffee beans was better this year, said Mr Sivilay Xayasaeng, LCA’s main coordinator.

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During the first five months of last year, Laos exported almost 12,000 tonnes of coffee worth around US$24.9 million, and the figure increased this year to almost 20,000 tonnes worth US$37 million. This year’s exports included the Arabica, Robusta, Exelsa and Roasted varieties.

In the case of Arabica coffee, especially the red beans that companies in Laos bought from farmers, the highest price was 3,200 kip and the lowest price was 2,800 kip in December last year.

At the same time, the highest and lowest prices of white beans were 16,500 kip and 15,000 kip, respectively, while the prices for Robusta were 12,500 kip and 11,000 kip, respectively.

Vietnam is largest foreign market for Laos, accounting for 65 percent of the total coffee exports, followed by Thailand, Japan, Cambodia, Belgium, Switzerland and the US.

Coffee plantations in Champassak province currently cover 50,250 hectares, 19,716 hectares in Saravan province, 10,131 hectares in Xekong province and 2,216 hectares in Attapeu province.

Due to the Covid-19 pandemic, most Lao coffee producers have faced a shortage of workers to care for their farms because most of the labour comes from other provinces. After placing orders, some importers suspended them until the situation returns to normal, while some cancelled their orders.

The companies cannot find new customers because of the government’s strict measures to prevent and control the spread of Covid-19, the LCA said.

Coffee is one of the top revenue earners among all the agricultural products exported by Laos. The quality of Lao coffee products has improved because of the cooperation and support of government organisations and the private sector.

Coffee is also being included as part of the wider socio-economic development goals framed by the Lao government to boost the overseas expansion of domestic firms.

While challenges remain, there are clear efforts to realise the Lao government’s efforts to boost the coffee industry. However, most farmers are still producing their crops using local techniques, which result in lower yields.